Enphase Energy, Inc. (ENPH) Accused of Misleading Shareholders
On March 15, 2019, Enphase filed its 2018 annual report touting revenue of $316.159 million and gross margins of 29.9%. As the class period progressed, Enphase continued to tout its increasing quarterly revenues. By December 12, 2019, Enphase lauded 2019 revenues of $619 million, a year-over-year increase of 96% as well as 2019 operating income of $122 million, an increase of 495% year-over-year. Contrary to its purported financial success, on June 17, 2020, Prescience Point Capital Management revealed that “based on research, estimate that at least $205.3 M of reported revenue in FY 2019 was fabricated” and that the Company inflated its international revenue significantly. The report concluded: “government bodies should investigate , Deloitte should launch an in-depth investigation of the Company’s accounting practices, and the Board of Directors should establish an independent committee to examine the findings and analyses presented in this report.” On this news, the stock declined $13.72 per share, or 26%, to close at $39.04 per share.
