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While a strong performer during 2022, at the start of 2023, sentiment for Enphase Energy (NASDAQ:ENPH) made a big move in the bearish direction. In January, the market bailed on ENPH stock. This sent shares in this maker of micro-inverters for home and business solar systems down significantly in a matter of weeks.
More recently, however, it appears that investors may be starting to change their tune when it comes to ENPH. After pulling back following the company’s latest earnings release, the stock has stabilized, moving higher in recent days.
One sell-side analyst has also issued an upgrade on shares, conceding that the perceived risks with Enphase are now baked into its valuation (more below). Fortunately for those looking to enter or add to a position, this positive sentiment shift has only just started. There’s still the opportunity to buy this promising growth play at an attractive entry price.
The Market is Warming Back Up to ENPH Stock
As I discussed last month, Enphase shares were the victim of short-sighted bearishness during January and for much of February. At the time, there was concern that the company’s growth would slow down considerably during 2023.
In the past few weeks, the market has warmed back up to ENPH stock. It took some time, but investors perhaps eventually realized that the company’s latest results and updates to guidance were stellar and indicative of further success ahead.
For the December quarter, Enphase beat on both revenue and earnings. Guidance for the current quarter also came in ahead of estimates.
Given these promising numbers, plus management’s commentary about future demand drivers, Janney’s Sean Milligan upgraded ENPH on Feb. 27, giving the stock a “buy” rating, and a $282 per share price target. Like I mentioned above, Milligan also conceded that, with ENPH’s pullback, risks such as slowing demand are “priced-in.”
While the market’s view on the stock has improved only slightly, enabling it to move back above $200 per share, there are quite a few catalysts that down the road could make the market as bullish on ENPH as I am today.