What Happened?
A number of stocks fell in the afternoon session after stocks gave back some of the gains from the previous day as the White House clarified the tariffs on imports from China would add up to 145%, while the baseline 10% tariffs remained in place for some countries. This reminded markets that the global trade environment remained volatile, limiting the potential for sustained gains.
Also, President Trump indicated he was willing to accept pain in the short term, and was aware his policies could cause a recession, but he remained more mindful of a more severe case of economic depression (higher unemployment and prolonged downturn). For investors, this suggested that the administration could prioritize long-term structural shifts over near-term economic stability, further increasing policy-driven risk in the markets.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, following stocks were impacted:
- Renewable Energy company Enphase (NASDAQ: ENPH) fell 8.9%. Is now the time to buy Enphase? Access our full analysis report here, it’s free.
- IT Services & Consulting company ASGN (NYSE: ASGN) fell 5.8%. Is now the time to buy ASGN? Access our full analysis report here, it’s free.
- Compliance Software company Workiva (NYSE: WK) fell 5.2%. Is now the time to buy Workiva? Access our full analysis report here, it’s free.
- Network Security company Zscaler (NASDAQ: ZS) fell 5.3%. Is now the time to buy Zscaler? Access our full analysis report here, it’s free.
- Hospitality & Restaurant Software company Toast (NYSE: TOST) fell 6%. Is now the time to buy Toast? Access our full analysis report here, it’s free.
Zooming In On Enphase (ENPH)
Enphase’s shares are extremely volatile and have had 44 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 6 months ago when the stock dropped 17.9% on the news that the company reported weak third-quarter earnings results that fell below Wall Street's estimates for revenue and EPS. Revenue in Europe decreased approximately 15% sequentially as demand in the region continued to decline. Guidance was also weak, with the revenue outlook for the next quarter falling below the consensus estimate. Overall, this quarter could have been better.
Enphase is down 30.4% since the beginning of the year, and at $49.68 per share, it is trading 63.1% below its 52-week high of $134.52 from June 2024. Investors who bought $1,000 worth of Enphase’s shares 5 years ago would now be looking at an investment worth $1,315.
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