Enphase Energy: Rooftops to Racks; Upgrade ENPH to EW

Research evidence excerpt

Enphase Energy: Rooftops to Racks; Upgrade ENPH to EW

ice Performance Exchange-Nasdaqutility-scale solar), if SST prices fall in the years to come.

52 Week range USD 73.74-25.77

Multiple expansion justified, but likely minimal financial impact until 2028: Financially, the

SST opportunity is unlikely to contribute materially until 2028, reflecting both product ramp

timelines and the pace of data center infrastructure transition. Based on our prior TAM work, we

estimate a ~5% share implies roughly $100–105mm of incremental revenue by 2028, or ~8% of

projected sales, with conservative gross margin assumptions in the mid-20s. While somewhat

modest initially, this revenue stream is skewed toward 2029 and beyond, supporting a longer-

duration growth narrative. This helps contextualize the recent re-rating in the stock, with the 2- Source: IDC

year forward P/E expanding from ~12x to ~22x (and briefly higher). In our view, the multiple Link to Barclays Live for interactive charting

expansion reflects investor willingness to underwrite future data center exposure despite

ongoing near-term weakness in the residential solar market. North America Clean Technology

Christine Cho, CFA

Despite longer term optimism, the near-term core business outlook is still weak: Near-term +1 212 526 8419

fundamentals remain challenged, driven primarily by structural changes to US residential solar christine.cho@barclays.com

economics. The elimination of the Section 25D tax credit has disproportionately impacted BCI, US

ENPH's core cash and loan customer base, accelerating share losses to TPO-heavy competitors Liam Duggan, CFA

like SEDG. As a result, volumes have declined sharply, with 1Q26 revenue down 21% y/y and 2Q +1 212 526 5416

guidance implying a similar contraction.