This company is providing relief from higher utility rates, and the stock is surging

By Tomi Kilgore

Enphase Energy's stock soars after a beat-and-raise quarter and a call that consumer demand for solar is bottoming

Enphase's stock was soaring Wednesday after the company's upbeat earnings report and a view that residential solar demand has bottomed as consumers look for relief from higher electricity costs.

Shares of Enphase Energy were soaring toward their biggest gain in six years on Wednesday, after the solar-power and energy-storage company's strong fourth-quarter results and outlook highlighted how consumers were finding ways to fend off rising electricity prices.

While the company (ENPH) acknowledged that some of the sales strength in the latest quarter was a result of a scramble to install solar and battery systems before a federal tax credit expired on Dec. 31, CEO Badri Kothandaraman reiterated his call late Tuesday that the first quarter would mark "the low point" for underlying demand.

He believes demand will improve for the rest of the year, particularly in the second half, as people look for cheaper alternatives to power their homes.

"Installer sentiment is also improving as higher utility rates strengthen the customer value proposition, including in several Northeast and Midwest markets that have seen double-digit residential electricity price increases over the last year," Kothandaraman said, according to an AlphaSense transcript of the post-earnings call with analysts.

Wall Street seemed to be buying into the bottoming notion, as no fewer than 13 analysts raised their stock-price targets after the earnings report, according to FactSet, and two analysts turned bullish.

Enphase's stock rocketed 37.4% in recent morning trading, toward its best day since the record 42.4% rally on Feb. 19, 2020. It was also headed for its highest close since April 22, 2025, after running up 96.2% since it closed on Nov. 12 at the lowest price since March 2020.

For the current quarter, the company said it expects revenue of $270 million to $300 million, which was above analyst expectations, with Kothandaraman saying the business was already 90% booked to the midpoint of that guidance range.

The company also reported adjusted earnings per share that rose to $2.96 from $2.37, and revenue that grew 19.5% to $410.4 billion. The results beat the average analyst estimates compiled by FactSet for EPS of 59 cents and revenue of $338.4 million.

RBC Capital Markets analyst Christopher Dendrinos was one of the analysts who turned bullish on the stock. He lifted his price target to $54.

"We believe demand has bottomed," he wrote in a Wednesday note to clients. Meanwhile, Enphase has "a strong opportunity to drive a market share recovery in [residential] and capture share in commercial as it continues to roll out new products."

Even with Wednesday's rally, Enphase shares have dropped 23% over the past 12 months, while the Invesco Solar exchange-traded fund TAN has hiked up 70% and the S&P 500 index SPX has advanced 14%.

-Tomi Kilgore

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02-04-26 1142ET