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On Wednesday, TD Cowen analysts adjusted their outlook on Enphase Energy (NASDAQ:ENPH), which currently trades at $47.90 and has declined over 52% in the past year, reducing the price target to $58 from the previous $78 while maintaining a Buy rating on the company’s shares. The revision was prompted by the impact of tariffs on the company’s gross margin, which fell below consensus for the second quarter of 2025. Enphase Energy is expected to face more significant tariff headwinds in the third quarter of 2025.
Analysts pointed to the tariffs as a key factor in the margin pressure, which has led to a less optimistic short-term financial outlook for Enphase Energy. Despite this challenge, the company is taking steps to mitigate the impact, maintaining a healthy gross profit margin of 47.29% and a strong current ratio of 3.53, indicating solid liquidity management. By sourcing battery cells outside of China, Enphase aims to return to the gross margin levels it achieved in the first quarter of 2025 by the second quarter of 2026.
TD Cowen’s analysts remain positive about Enphase’s future prospects, citing upcoming product launches as a reason for their continued endorsement. The company is poised to introduce the IQ10C battery in the second quarter of 2025 and the IQ9 in the fourth quarter of 2025. These new offerings are expected to help the company regain market share that was lost recently.
The report from TD Cowen reflects a cautious but optimistic view of Enphase Energy’s ability to navigate through current challenges and emerge stronger with its upcoming product launches. Enphase is anticipated to leverage these new products to improve its market position and financial performance in the coming months. According to InvestingPro analysis, the stock appears undervalued despite trading at a high P/E ratio of 63.66, with additional insights available in the comprehensive Pro Research Report covering 1,400+ top stocks.
In other recent news, Enphase Energy has faced several significant developments affecting its financial outlook. RBC Capital Markets reduced its price target for Enphase Energy to $54, citing concerns over tariffs on Chinese imports impacting the company’s cost structure and demand outlook. Similarly, BMO Capital Markets lowered its price target to $46, highlighting challenges such as decreased revenues and market share loss, leading to reduced revenue estimates for 2025 and 2026. Craig-Hallum also adjusted its price target to $73, noting the impact of rising interest rates and regulatory changes on the solar industry, although it maintained a Buy rating on the stock. Oppenheimer reduced its price target to $84, mentioning high interest rates and market consolidation as factors affecting residential solar demand, but remained optimistic about Enphase’s innovations like the Gen 4 battery and IQ9 inverter. KeyBanc Capital Markets maintained a Sector Weight rating, acknowledging the company’s first-quarter revenue exceeded its projections but fell short of broader market expectations, with ongoing challenges from tariffs and elevated capital costs. These recent developments highlight the various headwinds Enphase Energy is navigating, including the company’s strategic shift away from Chinese suppliers to mitigate tariff impacts by 2026.
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