It’s not possible to invest over long periods without making some bad investments. But really bad investments should be rare. So consider, for a moment, the misfortune of Enphase Energy, Inc. (NASDAQ:ENPH) investors who have held the stock for three years as it declined a whopping 81%. That would certainly shake our confidence in the decision to own the stock. And the ride hasn’t got any smoother in recent times over the last year, with the price 62% lower in that time. Shareholders have had an even rougher run lately, with the share price down 25% in the last 90 days. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don’t have to lose the lesson.
If the past week is anything to go by, investor sentiment for Enphase Energy isn’t positive, so let’s see if there’s a mismatch between fundamentals and the share price.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
Enphase Energy saw its EPS decline at a compound rate of 2.7% per year, over the last three years. This reduction in EPS is slower than the 43% annual reduction in the share price. So it seems the market was too confident about the business, in the past.
The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).
NasdaqGM:ENPH Earnings Per Share Growth July 19th 2025
It’s good to see that there was some significant insider buying in the last three months. That’s a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. This free interactive report on Enphase Energy’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
Enphase Energy shareholders are down 62% for the year, but the market itself is up 17%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year’s performance may indicate unresolved challenges, given that it was worse than the annualised loss of 6% over the last half decade. We realise that Baron Rothschild has said investors should “buy when there is blood on the streets”, but we caution that investors should first be sure they are buying a high quality business. It’s always interesting to track share price performance over the longer term. But to understand Enphase Energy better, we need to consider many other factors. For example, we’ve discovered 2 warning signs for Enphase Energy that you should be aware of before investing here.
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