What’s Next For Enphase Energy Stock After 30% Drop Last Month?

Enphase Energy Inc. stock (NASDAQ: ENPH) is down 30% in the past month (21 trading days), underperforming the S&P 500 which was roughly unchanged over this period. If you look at the change over the last five and ten days, too, the stock has returned -16% and -20%, respectively, hugely underperforming the broader market on both occasions. Enphase had reported mixed Q3 ’21 earnings back in October, with revenue rising sharply from $178 million in Q3 ’20 to $351 million in Q3 ’21. However, a significant rise in COGS and operating expenses dragged operating income down from $52 million to $37 million over this period. Combined with a 2x rise in the interest expense and a roughly unchanged effective tax rate, EPS dropped from $0.31 in Q3 ’20 to $0.16 in Q3 ’21. Additionally, Enphase is a high growth, capital-intensive solar company, and the looming threat of rising interest rates had a lot to do with the stock dropping over the past month.

Now, is Enphase Energy stock set to continue its underperformance or could we expect a rally? We believe that there is a strong 72% chance of a rise in Enphase stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last ten years. See our analysis on ENPH Stock Chance of Rise. For additional details about ENPH historical returns and comparison to peers, see Enphase Energy Stock Return. Additionally, for details about ENPH revenues and comparison to peers, see Enphase Energy Revenue Comparison.

Twenty-One Day: ENPH -30%, vs. S&P500 -0.8%; Underperformed market

(5% likelihood event; 72% probability of rise over next 21 days)

• ENPH stock dropped 30% the last twenty-one trading days (one month), compared to a broader market (S&P500) marginal drop of 0.8%
• A change of -30% or more over twenty-one trading days is a 5% likelihood event, which has occurred 132 times out of 2440 in the last ten years
• Of these 132 instances, the stock has seen a positive movement over the next twenty-one trading days on 95 occasions
• This points to a 72% probability for the stock rising over the next twenty-one trading days

Ten Day: ENPH -20%, vs. S&P500 -2%; Underperformed market

(8% likelihood event; 59% probability of rise over next 10 days)

• ENPH stock dropped 20% over the last ten trading days (two weeks), compared to a broader market (S&P500) drop of 2%
• A change of -20% or more over ten trading days is an 8% likelihood event, which has occurred 195 times out of 2451 in the last ten years
• Of these 195 instances, the stock has seen a positive movement over the next ten trading days on 116 occasions
• This points to a 59% probability for the stock rising over the next ten trading days

Five Day: ENPH -16%, vs. S&P500 -2.2%; Underperformed market

(6% likelihood event; 47% probability of rise over next five days)

• ENPH stock dropped 16% over a five-day trading period ending 1/10/2022, compared to the broader market (S&P500) drop of 2.2%
• A change of -16% or more over five trading days (one week) is a 6% likelihood event, which has occurred only 141 times out of 2456 in the last ten years
• Of these 141 instances, the stock has seen a positive movement over the next five trading days on 66 occasions
• This points to a 47% probability for the stock rising over the next five trading days

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