Investing.com -- Enphase Energy has surged 24% in premarket trading after its fourth-quarter results, with analysts at BMO Capital and RBC moving to upgrade the stock, signalling renewed confidence that the residential solar downturn has reached its trough.

The company reported quarterly revenue of $343.3 million, highlighting sell-through demand in the United States that was “at our highest level in more than two years” ahead of the Section 25D tax credit expiration. Non-GAAP gross margin came in at 46.1%.

BMO Capital Markets analyst Ameet Thakkar upgraded Enphase to Market Perform and raised his price target to $41, saying the company’s first-quarter revenue outlook was a key catalyst.

Thakkar said guidance of $235 million to $265 million, excluding safe-harbor volumes, was “ahead of our $227MM expectation.”

He added that management was “more definitive than we expected on directionally pointing to higher 2Q 2026 revenue,” which supports the view that revenue has now bottomed.

Thakkar noted that expected sequential growth in the second quarter was central to the upgrade, saying that “now that we have more clarity on the magnitude of the trough and revenues can grow sequentially from here we don’t expect ENPH shares to underperform.”

RBC Capital’s Christopher Dendrinos also moved to Outperform from Sector Perform, lifting his price target to $54.

He said “demand has bottomed” and argued that Enphase has “a strong opportunity to drive a market share recovery in resi and capture share in commercial as it continues to roll out new products.”