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Is Enphase Energy Undervalued Amid Solar Sector Challenges?

AInvest · last updated

- Enphase Energy’s Q2 2025 revenue rose to $363.2M, driven by 11% European growth, but faces margin compression from R&D (15.1%) and SG&A (25.4%) costs.

- The stock trades at 44.3x EBITDA (vs. peer median 9.0x), reflecting high valuation risks amid a 67.9% EBITDA drop and reliance on IRA tax credits.

- Solar sector challenges include 3% rising residential prices, interconnection delays, and policy uncertainty threatening IRA-driven deployment forecasts.

- A DCF model values Enphase at $45.96/share (16.9% below current price), requiring 2026 targets of $1.8B revenue and 20%+ EBITDA margins to justify valuation.

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