Enphase(ENPH) Prnewswire·2025-02-10 16:53Core Viewpoint - A securities fraud class action lawsuit has been filed against Enphase Energy, Inc. for misleading investors regarding its competitive position and revenue performance in the European solar inverter market during the specified Class Period [1][2]. Company Overview - Enphase Energy develops, manufactures, and sells solar microinverters, primarily for residential solar installations, converting solar panel output from direct current to alternating current [3]. - The company's international revenue has been growing, accounting for over 35% of total revenue in 2023, with significant expansion in Europe [3]. Market Context - Prior to the Class Period, Chinese solar companies disrupted the European solar inverter market by significantly increasing exports, with a reported 156% year-over-year increase in inverter export value [4]. - Key markets for Enphase in Europe, such as the Netherlands and Germany, experienced year-over-year surges of 342% and 330% respectively in Chinese inverter exports [4]. Financial Performance - Enphase reported a 25% year-over-year increase in European revenue during Q1 2023, with executives claiming rapid growth and high sell-through rates [5]. - However, by Q3 2023, the company experienced a 34% quarter-over-quarter decline in European revenue due to softening demand, contradicting earlier optimistic statements [5][7]. - In Q3 2024, Enphase announced a further 15% quarter-over-quarter decline in European revenue, with executives maintaining that they would not adjust pricing strategies despite competitive pressures [7]. Analyst Reactions - Following the decline in European revenue, analysts from BofA Securities reiterated an underperform rating on Enphase stock, criticizing the company's refusal to cut prices in response to competitive risks [5][8]. - Guggenheim downgraded Enphase stock to a sell rating, citing loss of market share to Chinese competitors selling at significantly lower prices [8].