Enphase Energy reported worse-than-expected fourth-quarter earnings and revenue late Tuesday while issuing sales guidance below Wall Street expectations. However, an analyst upgraded ENPH stock early Wednesday and shares skyrocketed, boosting other clean-energy plays.
The California-based solar company announced Q4 EPS sank 64% to 54 cents while revenue totaled $303 million, down 58% compared to Q4 2022. Meanwhile, Enphase Energy forecast first-quarter 2024 sales between $260-$300 million. Wall Street expected more than $303 million in revenue for Q1 2024. ENPH had posted $726 million in sales during the first quarter of 2023.
However, despite the Q4 earnings and revenue miss and pessimistic guidance, Oppenheimer upgraded ENPH stock Wednesday. The firm now has an "outperform" rating on the shares with a 133 price target. Shares closed at 100.52 on Tuesday.
Oppenheimer's view is that with Enphase Energy guiding well below consensus, the issue becomes one of inventory overhang, underlying demand levels and how it stacks up against competitors.
The firm added that its expects ongoing volatility for ENPH stock, but that the upgrade is warranted because the downside scenarios are fully built into the stock price.
ENPH stock surged 16.9% to 117.53 Wednesday during market action. Ahead of Wednesday trade, the stock was down more than 3% in February, 36% above a November low and about 70% off a December 2022 high.
ENPH Stock: Clean Energy Plays
The IBD-tracked Utility-Electric Power industry group fell 13% in 2023. Meanwhile, IBD's Energy-Solar industry group sank 28% last year, continuing its seesaw behavior. Rising interest rates challenged the industry. Denmark-based wind power giant Orsted decided to cancel two major projects off the New Jersey coast in late 2023. And clean-energy stocks face more bad news to begin 2024.
On Wednesday, Orsted announced more bad news, reporting it would suspend dividends for 2023, 2024 and 2025 as it cut its wind installation guidance by around 30% for 2030.
Investors Await Presidential Election Result For Clean-Energy Stock Clarity
SolarEdge Technologies announced Jan. 21 it would cut 900 jobs, 16% of its workforce, due to weak demand. This follows hydrogen fuel-cell play Plug Power reporting on Jan. 17 plans to sell up to $1 billion in shares. The company aimed to use proceeds to shore up its financials, which cratered to end 2023.
Clean-energy stock First Solar gained 15% last year but retreated more than 14% to begin 2024. Meanwhile, ENPH stock sank 50% in 2023. Ahead of Wednesday trade, that trend continued in 2024, with ENPH dropping more than 24%.
Along with ENPH stock, SEDG shares jumped more than 13% Wednesday. FSLR stock advanced 3%.
Please follow Kit Norton on X, formerly known as Twitter, @KitNorton for more coverage.
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