Enphase Shares Jump 17% Despite Earnings Miss 

Shares of renewable energy company Enphase Energy Inc. (NASDAQ:ENPH) have rocketed 17% in Wednesday's intraday session a day after the company returned a quarterly report that missed Wall Street's expectation. 

Enphase reported Q4 2023 Non-GAAP EPS of $0.54, $0.01 lower than the Wall Street consensus while revenue of $302.57M (-58.2% Y/Y) missed by $25.44M. Q4 net income fell to $21M, or $0.15/share, from $154M, or $1.06/share, in the previous year's corresponding quarter. 

The company reported that revenue in its pivotal United States and European markets plunged 35% Q/Q and 70% Q/Q, respectively, primarily as a result of reduced shipments due to high inventory levels with the company's distribution partners along with a further softening in demand.

However, the market chose to focus on comments by the company that business activity could be close to bottoming out.

"We think Q1 could be the bottom quarter. Europe is already showing early signs of recovery, and we expect the non-California states to bounce back quickly,"  CEO Badri Kothandaraman said on the company's post-earnings conference call.

The company provided Q1 2024 guidance as follows:

• Revenue in the range of $260.0 million to $300.0 million, significantly lower than the Wall Street consensus at $315.94M even at the high end of its guidance range.
• GAAP gross margin of 42.0% to 45.0%, with net IRA benefit while Non-GAAP gross margin is expected to clock in at 44.0% to 47.0% with net IRA benefit 
• GAAP operating expenses in the range of$144.0 million to $148.0 million
• Non-GAAP operating expenses to be within a range of $80.0 million to $84.0 million

Oppenheimer analysts upgraded Enphase to Outperform from Market Perform with a $133 price target , saying downside scenarios are fully baked into the share price (current share price at $117.70). 

According to Oppenheimer, "a beatable baseline on sales/margin is being established and the company is delivering on product enhancements that drive system level performance and cost reductions."

By Alex Kimani for Oilprice.com

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