Enphase Energy surges on expectations for demand rebounds

Solar equipment manufacturer Enphase Energy (ENPH) stock soars higher Wednesday morning despite falling short of fourth-quarter earnings estimates on Tuesday.

Yahoo Finance’s Rachelle Akuffo and Akiko Fujita break down Enphase CEO and President Badri Kothandaraman's comments on first-quarter outlook and expectations for rebounding demand.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Eyek Ntekim

Video Transcript

[AUDIO LOGO]

AKIKO FUJITA: Enphase Energy is skyrocketing after calming investor fears around inventory levels and forecasting a pickup in demand. The stock now up roughly 17.5%. But Rachelle, this is a name that has had a very choppy ride over the last year. The stock down more than 50%.

So much of this is about the company and its sensitivity to interest rates. When you think about what they do, batteries, as well as inverters that control solar panels, a lot of people have held back on some of those investments because of the higher rates. And the CEO for Enphase making the argument that they expect the pickup to start to happen here, even outside of states like California, partly because of the more friendly rate environment.

RACHELLE AKUFFO: Indeed, they did say on that post earnings call that the CEO is saying we think Q1 could be the bottom quarter. And really seeing Europe starting to pick up as well, because they did note when you look at what they saw in terms of revenues, Q4 revenues in Europe, that was down about 70% quarter over quarter. So clearly, some concern there. But they are expecting a turnaround, at least based on what they're saying on that post earnings call here, Akiko.

AKIKO FUJITA: Yeah, a tough 2023 sales down, more than 50% from the prior year.