Shares of Enphase Energy (ENPH) plunged 14.06% in Wednesday's pre-market trading session following the company's disappointing first-quarter 2025 earnings report and weak second-quarter guidance. The solar technology firm's results fell short of analyst expectations, raising concerns about its near-term growth prospects in the competitive renewable energy sector.

For the first quarter of 2025, Enphase reported adjusted earnings per share of $0.68, missing the consensus estimate of $0.70. Revenue came in at $356.1 million, also falling short of the expected $361.43 million. While these figures represent year-over-year growth, they failed to meet market expectations, contributing to the sharp stock decline.

Adding to investor worries, Enphase provided a disappointing outlook for the second quarter, projecting revenue between $340 million and $380 million, which falls below analysts' expectations. The company also warned that tariffs could significantly impact its gross margins in the coming quarters. CEO Badri Kothandaraman stated that tariffs are expected to reduce gross margins by about 2% in the second quarter and between 6% and 8% in the third quarter, primarily due to its battery cells being sourced from China. Kothandaraman added that while the company is working on mitigating these effects, the full offset is expected to be achieved only by the second quarter of 2026. In response to the earnings report, several analysts have adjusted their price targets for Enphase Energy, further pressuring the stock.