Enphase Energy, Inc. (NASDAQ: ENPH) Securities Fraud Class Action

LEAD PLAINTIFF DEADLINE IS FEBRUARY 11, 2025.

If you have suffered losses and would like to discuss your rights, please fill out this form or you may contact Jonathan Naji, Esq. at (484) 270-1453 or via e-mail at info@ktmc.com.

Case Background:
Enphase develops, manufactures, and sells solar microinverters, which are primarily used in residential solar installations to convert solar panel output from direct current to alternating current (which can be transmitted to the power grid).  As is relevant here, Enphase’s international revenue has been growing in recent years as the Company expands globally, particularly in Europe, with international revenue accounting for more than 35% of the Company’s total revenue in 2023.
  
Prior to the beginning of the Class Period, Chinese solar companies were significantly disrupting the European solar inverter market by selling or “dumping” their products at extremely low prices, a fact highlighted by Morgan Stanley Research on April 24, 2023, when it reported that Chinese inverter export value increased 156% year-over-year internationally, with the Netherlands and Germany—two of Enphase’s key markets in Europe—showing year-over-year surges of 342% and 330%, respectively.  

The Class Period begins on April 25, 2023, when the Company announced its first quarter 2023 financial results.  Among other things, Enphase reported an approximately 25% year-over-year increase in European revenue.  During the accompanying quarterly investor earnings call held that same day, Defendant Badrinarayanan Kothandaraman, the Company’s President and Chief Executive Officer, touted that Enphase’s “European business is growing rapidly,” with “sell-through of our microinverters in Europe reach[ing] an all time high” in the quarter.  When asked specifically about competition in Europe from Chinese manufacturers and the risk of margin erosion caused by price deflation from those competitors, Defendant Raghuveer Belur, a Company co-founder and the Company’s Senior Vice President and Chief Products Officer, dismissed such concerns, stating that “[c]ompetition is strong everywhere” and is “nothing new [in Europe],” while Defendant Kothandaraman claimed that Enphase does not “see any drop in [it’s] pricing.” 

Investors began to learn the truth about Enphase’s competitive challenges in Europe after the market closed on October 26, 2023, when the Company reported an approximately 34% quarter-over-quarter decline in European revenue in the third quarter of 2023 due to “softening in demand.”  During the accompanying quarterly investor earnings call held that same day, Defendant Kothandaraman was adamant that the Company would not adjust its pricing strategies, despite countervailing competitive market forces, emphasizing that “there’s no broad-based pricing adjustment from us.” 

In response to the decline in European revenue and Defendant Kothandaraman’s unwillingness to consider pricing adjustments, analysts at BofA Securities reiterated their underperform rating on the stock and criticized the Company for refusing to cut prices to pursue market share, as “competitive risks” endured in Europe.  On this news, the price of Enphase common stock declined $14.09 per share, or nearly 15%, from a close of $96.18 per share on October 26, 2023, to close at $82.09 per share on October 27, 2023.  
 
Throughout the remainder of the Class Period, Defendants continued to downplay the competitive threats in the European solar inverter market and reassured investors that Enphase’s European pricing strategy was sound.  

Investors fully learned the truth about Enphase’s competitive positioning in Europe after the market closed on October 22, 2024, when the Company announced its third quarter 2024 financial results and revealed an approximately 15% quarter-over-quarter decline in European revenue due to “further softening in European demand.”  During the accompanying quarterly investor earnings call held that same day, Defendant Kothandaraman was again asked whether, in light of the Company’s weakness in Europe, Enphase would alter its pricing strategy.  While he acknowledged that the Company had occasionally made customer-specific price concessions, Defendant Kothandaraman reiterated that “we are not dropping pricing anywhere,” despite prevailing competitive headwinds.

In response to Enphase’s continued poor performance in Europe, Guggenheim downgraded Enphase stock to a sell rating from a neutral rating and explained that Enphase is “losing share to Chinese competitors who are willing to sell at less than half [Enphase]’s level.”  On this news, the price of Enphase common stock declined $13.76 per share, or nearly 15%, from a close of $92.23 per share on October 22, 2024, to close at $78.47 per share on October 23, 2024.

This Complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts, about the Company’s business and operations.  Specifically, Defendants systematically overstated the Company’s ability to maintain its pricing levels and market share for microinverter products in Europe in the face of competition from low-cost, Chinese alternatives. 

What is a Lead Plaintiff?
A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Filling out the online form above or communicating with any counsel is not necessary to participate or share in any recovery achieved in this case.  Any member of the purported class may move the court to serve as a lead plaintiff through counsel of his/her choice, or may choose to do nothing and remain an inactive class member.