Solar Stocks Are Selling Off. This Energy Stock Is Leading The Sector Lower
Enphase Energy Inc (NASDAQ:ENPH) shares are tumbling Wednesday after the company reported second-quarter results and issued guidance with a midpoint below estimates.
Enphase Earnings: Enphase Energy beat analyst estimates on the top and bottom lines in the second quarter with revenue of $363.15 million versus expectations of $359.26 million, and adjusted earnings per share of 69 cents versus estimates of 63 cents.
U.S. revenue increased approximately 3% quarter-over-quarter and revenues in Europe increased approximately 11% sequentially, fueled by higher microinverter and battery sales.
Despite the better-than-expected results, Enphase Energy shares are selling off on Wednesday after the midpoint of the company's third-quarter guidance came in softer than what analysts were anticipating. Enphase guided for third-quarter revenue of $330 million to $370 million versus estimates of $363.25 million, according to Benzinga Pro.
BofA Securities analyst Julien Dumoulin-Smith maintained Enphase with an Underperform rating on Wednesday and lowered the price target from $31 to $30, which may be adding to the selling pressure.
Solar stocks have underperformed so far this year driven by fears regarding tax credit changes. The signing of the “One Big Beautiful Bill” earlier this month confirmed that the residential solar tax credit will be phased out at the end of the year.
Bloomberg reported this week that solar installations in June were down 85% month-over-month in China. The slowdown follows an installations surge earlier this year driven by anticipation of policy deadlines and was largely expected.
Still, several solar names are facing selling pressure on Wednesday. Sunrun Inc (NASDAQ:RUN) was down 3.32% at last check, SolarEdge Technologies Inc (NASDAQ:SEDG) was down about 7% and First Solar Inc (NASDAQ:FSLR) was down approximately 1.5% at the time of publication.
ENPH Price Action: Enphase Energy shares were down 14.8% at $36.20 at the time of publication Wednesday, according to Benzinga Pro.
Enphase Energy is currently experiencing significant downward momentum, with the stock trading below its 50-day moving average of $42.30, indicating a bearish trend. Key support is observed at the 52-week low of $33.01, while resistance remains at the 50-day moving average.
Wednesday’s trading volume of 12.46 million shares is notably higher than the average of 8.76 million suggesting increased selling pressure. Intraday, the stock opened at $40.03, reached a high of $40.29, and fell to a low of $36.51, reflecting a volatile session with a bearish bias.
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