Enphase Energy heads into the week with a striking contradiction at its core: the stock has rallied 20% over the past month, yet short sellers have been rebuilding positions at the fastest pace in months.
Short interest has climbed sharply — up nearly 37% from a month ago to 24.3% of free float. That is a heavyweight bearish positioning for any stock. Over the past week alone, estimated SI rose almost 8%, climbing from roughly 22.3% to 24.3% of the float. The ORTEX short score of 66.3 reflects that tension, though it eased from a week-high near 69 on May 8, suggesting some daily choppiness in borrowing demand rather than a straight-line escalation. Importantly, the lending market remains far from strained. Borrow availability has tightened meaningfully since early April — when it ran above 500% — but at 244% now it is still in comfortable territory, meaning new shorts face no particular friction in sourcing stock. Cost to borrow at 0.44% annualised is essentially flat for a month and negligible in absolute terms. The message from the lending market is that availability is tightening as more shares get borrowed, but there is no squeeze pressure building yet.
Options traders are not pressing the same bearish case. The put/call ratio of 0.76 tracks almost exactly its 20-day average, with a z-score barely below zero. Call open interest is comfortably dominant, and the PCR is running at the lower half of its 52-week range — the 52-week high was 1.31, so current readings look decidedly calm by comparison. The divergence between elevated short interest and relaxed options positioning is the standout tension this week.
The Street's reaction to the April 28 earnings print explains much of the repositioning. The stock dropped 11.5% the day after results — a sharp post-earnings penalty. Within a week it clawed back to a 2.2% gain, but the damage to analyst targets was done. Nearly every firm from JP Morgan to Barclays trimmed price targets in the days that followed, and the direction of travel was unanimous: lower. JP Morgan cut to $35 from $39 while keeping Neutral; Wells Fargo went to $45 from $50 but retained Overweight. Barclays, with an Underweight, shaved to $30 from $31 most recently on May 5. Evercore ISI made the largest move, dropping to $37 from $43. The consensus mean now sits at $40.38, a thin 7.7% return potential above the current $37.48 — the Street is not forecasting much upside from here. Bulls lean on the retrofit market opportunity, the new GaN-based IQ9S microinverter commercial launch, and the company's customer service moat. Bears point to weak residential solar demand in the US, margin pressure from competition in battery storage, and the stock's near-total dependence on ITC/tax credit continuity.
The $52 million safe harbor deal announced on May 7 — covering IQ9 microinverters through a US third-party-ownership provider — is the key catalyst keeping the stock bid despite the analyst target cuts. Safe harbor agreements lock in clients ahead of potential ITC changes and expand Enphase's contracted backlog, addressing the most direct bear concern around demand visibility. That news helped lift the stock more than 4% on the week even as the broader analyst community remained cautious. BlackRock added 1.3 million shares as of April 30 to reach 16.2% of shares outstanding — a meaningful add — while the Vanguard Group and State Street also made smaller top-ups. Counter to that, chairman Thurman Rodgers sold 137,250 shares in March at $43.61, worth around $6 million — a trade that now looks well-timed given the stock is $6 lower.
Forward EPS momentum ranks in only the 16th percentile over 30 days and the 19th percentile over 90 days, which means the analyst estimate revision cycle is still running against the stock. The 12-month forward EPS year-on-year increase ranks in the 93rd percentile, suggesting the growth story remains intact over a longer horizon. PE has re-rated upward to 16.9x over the past month as the stock recovered, with P/B now at 3.5x and EV/EBITDA at 14.2x. The next earnings event is July 28. What happens between now and then to safe harbor deal flow, and whether residential installations data from California and Europe show any sequential recovery, will determine whether the short sellers rebuilding at 24% of float are early or simply correct.
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