Enphase Energy Sinks 20% On Weak Q4 Guidance As Residential Solar Slump Deepens; Solaredge Drops 10%, Sunrun Falls 5%, First Solar Dips

The post Enphase Energy Sinks 20% on Weak Q4 Guidance as Residential Solar Slump Deepens; SolarEdge Drops 10%, Sunrun Falls 5%, First Solar Dips appeared first on 24/7 Wall St..

A quarter and outlook showing U.S. rooftop solar demand still sliding are sending Enphase Energy (NASDAQ:ENPH) sharply lower, and residential-focused peers are falling with it. Enphase stock recently traded at $24, down 20%.

Following Enphase Energy’s report, SolarEdge Technologies (NASDAQ:SEDG) stock is at $29, down 10%. Sunrun (NASDAQ:RUN) stock is at $7, down 5%.

Enphase’s Weak Outlook Cuts Deeper Than Its Quarterly Miss

After the close on October 27, Enphase reported Q3 2026 results that missed on both the top and bottom lines. The company reported revenue of $293.3 million, short of the $306.1 million S&P consensus, with the year over year (YoY) decline at 28.5%.

Enphase Energy posted adjusted diluted earnings per share (EPS) of $0.41, trailing the $0.50 S&P consensus. Moreover, Enphase Energy said global sell-through, a measure of how much product distributors and installers move to end customers, rose 1% sequentially against its expectation of 10% growth.

In the U.S., Enphase Energy said that its sell-through rose 5% from the prior quarter but fell 35% YoY, and the company’s Europe revenue declined 11% sequentially. Badri Kothandaraman, the company’s CEO, stated, “Our core U.S. residential solar market continues to face headwinds from higher interest rates and the expiration of the Section 25D federal tax credit.” Safe harbor sales, made to lock in tax credit eligibility, contributed $85 million to Enphase’s Q3 revenue, so underlying demand was weaker than the headline suggests.

The guidance did greater damage. Enphase’s Q4 2026 revenue guidance midpoint of $240 million sits well below the $298.6 million S&P consensus. Behind that outlook, Enphase Energy assumes sell-through falls another 10% sequentially and plans to ship below sell-through to drain channel inventory. Within the range, Enphase counts $51.2 million of safe harbor revenue.

Enphase’s AI Data Center Push and a Split Solar Group

During the quarter, Enphase Energy more than doubled its IQ Solid-State Transformer (IQ SST) customer and partner pipeline to over 50, including a leading hyperscaler and a global AI computing leader (the broader set of power, cooling, and networking suppliers behind the AI data-center expansion is something we broke down in a free report on AI infrastructure stocks). Pilots with customers are scheduled for 2027, with commercial shipments to follow in 2028. Kothandaraman offered his forecast: “By 2030, we believe IQ SST has the potential to become a billion-dollar annual revenue business for Enphase in the data center market alone.”

Those revenue dates sit years out, so Enphase stock is trading on residential demand for now. SolarEdge and Sunrun are falling alongside Enphase’s read on rooftop demand. Europe and U.S. commercial rooftops carry more weight at SolarEdge, while Sunrun sells home systems through no-upfront-cost subscriptions. Year to date (YTD), SolarEdge stock is up 0.9% and Sunrun stock is down 61%, while Enphase stock is down 26%.

First Solar (NASDAQ:FSLR) stock is at $174, down 1%. Selling thin-film panels to utility-scale developers, backed by a contracted backlog through 2030, keeps First Solar further from the residential tax credit and rate story. Measured YTD, First Solar shares are down 34%, so the panel maker hasn’t escaped this year’s broader solar selling.

Enphase’s Next Tests: Rates, Inventory and the Data Center Timeline

The central bank’s policy decision is due at 2 p.m. Eastern, and financing costs drive much of the demand for Enphase’s rooftop products. With the upper bound of the federal funds target range at 4%, lower rates could ease customer financing, while a firmer stance could keep installers under pressure.

Kothandaraman said channel inventory ended Q3 “a little above normal,” and Enphase plans to ship $20 million below sell-through in Q4 to work it down. The next test for Enphase is whether that adjustment clears before a seasonally slow Q1 2027. Clearing the channel could set up cleaner comparisons, while another guidance cut would signal a deeper slump.

Shareholders tracking the data center story can watch for Enphase’s 34.5-kilovolt validation and megawatt-scale system demonstration, both scheduled for the end of 2026. Hitting those marks could support the longer-term case, while missing them could weaken it. A conservative approach could make sense until Enphase’s channel inventory adjustment completes.

The post Enphase Energy Sinks 20% on Weak Q4 Guidance as Residential Solar Slump Deepens; SolarEdge Drops 10%, Sunrun Falls 5%, First Solar Dips appeared first on 24/7 Wall St..