2024-04-27 08:30:54 ET
Summary
- Enphase Energy stock has been battered by interest rate headwinds, intensifying volatility and uncertainty.
- Q1 earnings show a decline in revenue and profitability, raising deep concerns about Enphase's secular growth thesis.
- ENPH's guidance for Q2 suggests under-shipment of end market demand, but management highlighted being cautious.
- I explain why ENPH has likely seen its worst selloff in 2023, even as near-term buying sentiments could remain tepid.
- With significant pessimism likely reflected, ENPH stock looks well-positioned for further gains through 2024.
Enphase Stock Hampered By Interest Rate Headwinds
Enphase Energy ( ENPH ) investors have continued to experience significant volatility even as ENPH bottomed out in November 2023. ENPH surged to its December 2023 highs as investors anticipated a dovish Fed ready for rate cuts in 2024. I urged investors to consider buying ENPH's dips in mid-February 2024. However, more recent challenging inflationary dynamics and more hawkish commentary from Fed officials have tempered expectations of the initial six cuts anticipated at the start of 2024. Notably, the market has lowered their expectations significantly to one or even possibly no cuts this year. While Citi ( C ) analysts still expect 100 bps of rate cuts starting in July 2024, I caution investors to watch the 10Y ( US10Y ) price action carefully, as the 10Y has resumed its upward climb since bottoming out in early March 2024....
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Enphase: Market Pessimism Won't Last Forever