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Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 12.24%. Enphase Energy has a trailing four-quarter average negative earnings surprise of 7.23%.
Factors to Note
ENPH has been experiencing a broad-based slowdown in demand for its products across the United States since the second quarter of 2023 and in Europe since the second half of 2023. This slowdown has led to inventory build-up and reduced shipments of its microinverters, a trend we expect to have negatively impacted its revenues in the third quarter as well.
Within the United States, sell-through of its microinverters and batteries is likely to reflect positive year-over-year growth trends for the non-California states, with its overall channel inventory having returned to normal levels since the second quarter. However, since California is still undergoing the transition from net energy metering (NEM) 2.0 to NEM 3.0, sell-through of ENPH’s products in this state is not anticipated to reflect positive growth figures, thereby affecting its overall U.S. revenues.
Within Europe, countries like France, the Netherlands and Germany are expected to deliver solid sales performance. Notably, Enphase Energy launched IQ Battery 5P in the Netherlands, France, Luxembourg and Belgium during the third quarter, which is likely to fetch notable revenue growth through solid battery sales. However, ENPH expects its overall revenue performance in Europe to be unimpressive in the third quarter due to a seasonal demand slowdown, which is likely to have been exacerbated by the current pricing competition in this region.
Apart from Europe and the United States, Canada and Mexico are two nations where ENPH has started shipping its third-generation battery, IQ 5P, in the third quarter. The company is expected to witness positive top-line performance in these two regions.
The Zacks Consensus Estimate for ENPH’s third-quarter sales is pinned at $391.7 million, which indicates a year-over-year decline of 28.9%.
With continuous investment in new products and customer service, the company is expected to have incurred higher operating expenses, which, in turn, is likely to have hurt its third-quarter earnings figure despite its steady efforts to reduce costs. This, along with a dismal top-line performance as well as notable restructuring and asset impairment charges expected in relation to its 2023 restructuring plan, is likely to have dampened its overall bottom-line performance.
The Zacks Consensus Estimate for earnings per share is pinned at 77 cents, which indicates a year-over-year decline of 24.5%.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Enphase Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Enphase Energy’s Earnings ESP is +1.45%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Here are three companies from the same sector, which have the right combination of elements to post an earnings beat this reporting cycle.
Ameresco (AMRC - Free Report) currently has an Earnings ESP of +8.62% and a Zacks Rank of 3. The Zacks Consensus Estimate for AMRC’s third-quarter sales is pegged at $485.6 million, implying an improvement of 44.9% from the prior-year figure.
The consensus estimate for AMRC’s earnings is pegged at 50 cents per share, reflecting an improvement of 25% from the year-ago quarter.
Array Technologies, Inc. (ARRY - Free Report) currently has an Earnings ESP of +14.17% and a Zacks Rank of 3. The Zacks Consensus Estimate for ARRY’s third-quarter sales is pegged at $228 million.
The consensus estimate for ARRY’s earnings is pegged at 13 cents per share. The company has a four-quarter average earnings surprise of 132.96%.
Sunrun Inc. (RUN - Free Report) currently has an Earnings ESP of +12.57% and a Zacks Rank of 3. The Zacks Consensus Estimate for RUN’s third-quarter sales is pegged at $560.6 million.
The consensus estimate for earnings is pegged at a loss of 16 cents per share. The company has a four-quarter average earnings surprise of 79.87%.
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Enphase Energy to Post Q3 Earnings: What's in Store for the Stock?
Enphase Energy, Inc. (ENPH - Free Report) is scheduled to report third-quarter 2024 results on Oct. 22, after the closing bell.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the last reported quarter, the company’s earnings missed the Zacks Consensus Estimate by 12.24%. Enphase Energy has a trailing four-quarter average negative earnings surprise of 7.23%.
Factors to Note
ENPH has been experiencing a broad-based slowdown in demand for its products across the United States since the second quarter of 2023 and in Europe since the second half of 2023. This slowdown has led to inventory build-up and reduced shipments of its microinverters, a trend we expect to have negatively impacted its revenues in the third quarter as well.
Enphase Energy, Inc. Price and EPS Surprise
Enphase Energy, Inc. price-eps-surprise | Enphase Energy, Inc. Quote
Within the United States, sell-through of its microinverters and batteries is likely to reflect positive year-over-year growth trends for the non-California states, with its overall channel inventory having returned to normal levels since the second quarter. However, since California is still undergoing the transition from net energy metering (NEM) 2.0 to NEM 3.0, sell-through of ENPH’s products in this state is not anticipated to reflect positive growth figures, thereby affecting its overall U.S. revenues.
Within Europe, countries like France, the Netherlands and Germany are expected to deliver solid sales performance. Notably, Enphase Energy launched IQ Battery 5P in the Netherlands, France, Luxembourg and Belgium during the third quarter, which is likely to fetch notable revenue growth through solid battery sales. However, ENPH expects its overall revenue performance in Europe to be unimpressive in the third quarter due to a seasonal demand slowdown, which is likely to have been exacerbated by the current pricing competition in this region.
Apart from Europe and the United States, Canada and Mexico are two nations where ENPH has started shipping its third-generation battery, IQ 5P, in the third quarter. The company is expected to witness positive top-line performance in these two regions.
The Zacks Consensus Estimate for ENPH’s third-quarter sales is pinned at $391.7 million, which indicates a year-over-year decline of 28.9%.
With continuous investment in new products and customer service, the company is expected to have incurred higher operating expenses, which, in turn, is likely to have hurt its third-quarter earnings figure despite its steady efforts to reduce costs. This, along with a dismal top-line performance as well as notable restructuring and asset impairment charges expected in relation to its 2023 restructuring plan, is likely to have dampened its overall bottom-line performance.
The Zacks Consensus Estimate for earnings per share is pinned at 77 cents, which indicates a year-over-year decline of 24.5%.
What the Zacks Model Unveils
Our proven model predicts an earnings beat for Enphase Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat, which is the case here.
Earnings ESP: Enphase Energy’s Earnings ESP is +1.45%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Enphase Energy currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks to Consider
Here are three companies from the same sector, which have the right combination of elements to post an earnings beat this reporting cycle.
Ameresco (AMRC - Free Report) currently has an Earnings ESP of +8.62% and a Zacks Rank of 3. The Zacks Consensus Estimate for AMRC’s third-quarter sales is pegged at $485.6 million, implying an improvement of 44.9% from the prior-year figure.
The consensus estimate for AMRC’s earnings is pegged at 50 cents per share, reflecting an improvement of 25% from the year-ago quarter.
Array Technologies, Inc. (ARRY - Free Report) currently has an Earnings ESP of +14.17% and a Zacks Rank of 3. The Zacks Consensus Estimate for ARRY’s third-quarter sales is pegged at $228 million.
The consensus estimate for ARRY’s earnings is pegged at 13 cents per share. The company has a four-quarter average earnings surprise of 132.96%.
Sunrun Inc. (RUN - Free Report) currently has an Earnings ESP of +12.57% and a Zacks Rank of 3. The Zacks Consensus Estimate for RUN’s third-quarter sales is pegged at $560.6 million.
The consensus estimate for earnings is pegged at a loss of 16 cents per share. The company has a four-quarter average earnings surprise of 79.87%.