RBC Capital Markets analyst Christopher Dendrinos downgraded Enphase Energy, Inc. (NASDAQ:ENPH) to Sector Perform from Outperform, lowering the price forecast to $100 from $125.

According to the analyst, competitive market dynamics may impact the company's prospects, leading to a slower growth rate next year that is not accounted for in current consensus estimates.

Dendrinos models 2025 revenue of $1.825 billion, which is 8% below consensus, and 2026 revenue of $2.05 billion, which is 13% below consensus.

The analyst estimates that 6% of Enphase Energy's inverter installations in California are part of projects using Powerwall 2 batteries.

If Tesla, Inc. successfully transitions customers to Powerwall 3, Enphase Energy could lose this inverter market share. While this trend is primarily observed in California, it still represents an incremental headwind for Enphase.

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Battery demand has exceeded expectations year-to-date, and the analyst sees continued growth next year with ongoing NEM 3 adoption.

However, that growth from current levels may start to slow, the analyst cautioned.

The demand this year can be attributed to NEM 3 adoption and market share gains in California, where Enphase Energy has successfully captured share with its IQ Battery 5P.

Price Action: ENPH shares are trading lower by 8.79% to $92.55 at last check Tuesday.

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