On Thursday, Piper Sandler adjusted its outlook on Fluence Energy Inc. (NASDAQ:FLNC), reducing the price target from the previous $25.00 to $20.00, while maintaining a Neutral rating on the company's stock.
Fluence Energy, which operates on an off-cycle reporting schedule, is anticipated to have made strides in securing revenue bookings for fiscal year 2024, with 80% reportedly secured in the previous quarter. However, the firm does not foresee Fluence Energy fully mitigating guidance risks, indicating a necessity for additional bookings and shipments in the third and fourth quarters.
Piper Sandler's expectations for the company's EBITDA for the quarter align closely with the consensus. The analyst anticipates that Fluence Energy will report that average selling prices (ASPs) for new bookings have stabilized, following previous declines driven by commodity prices.
Additionally, the company is expected to reveal that it has not yet experienced delays due to critical equipment shortages, benefiting from its connections with larger developers.
Despite these positive developments, the risk of future disruptions remains a topic of concern. The market is looking for indications from Fluence Energy on how it plans to navigate potential challenges in the supply chain.
The firm's high level of management disclosure provides clear insights into the various factors impacting the business, and management has been recognized for its track record of meeting expectations.
Piper Sandler appreciates Fluence Energy's position in the emerging storage market and the clarity provided by its management. However, the firm maintains its Neutral stance, suggesting that a more constructive view on the stock would require confidence in the company's performance extending into fiscal year 2026, which Piper Sandler deems premature at this stage.
InvestingPro Insights
As Fluence Energy Inc. (NASDAQ:FLNC) navigates the market's demand for clear guidance and stability, InvestingPro data presents a mixed financial picture. With a market capitalization of $2.99 billion, the company's stock is trading at a high Price/Book multiple of 7.19, reflecting a premium valuation compared to its book value. Despite a significant revenue growth of 70.25% over the last twelve months as of Q1 2024, Fluence Energy's gross profit margin stands at a modest 7.27%, indicating challenges in maintaining profitability.
InvestingPro Tips suggest that while Fluence Energy holds more cash than debt, which is a positive sign of financial health, the company has suffered from weak gross profit margins and has not been profitable over the last twelve months. However, analysts are optimistic about the future, anticipating sales growth and predicting that the company will be profitable this year. These insights could be crucial for investors considering the stock's recent volatility and significant price drop over the last six months.
For those looking to delve deeper, there are over 10 additional InvestingPro Tips available for Fluence Energy, which can be accessed through the InvestingPro platform. To enhance your investment research, use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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