HSBC has downgraded Fluence Energy (FLNC, Financial) from a Buy to a Hold rating, setting a new price target of $4, down significantly from $15. This adjustment comes amid heightened tensions in trade policies, particularly under the Trump Administration, which has intensified tariffs on imports from China.
The newly imposed 145% tariff on Chinese battery cell imports is expected to drive up system costs by more than 50%. This surge in costs could render numerous projects financially unfeasible. These developments are causing significant ripples across the U.S. energy storage sector, prompting analysts to reassess the financial outlook for companies like Fluence Energy (FLNC, Financial).
Wall Street Analysts Forecast
Based on the one-year price targets offered by 23 analysts, the average target price for Fluence Energy Inc (FLNC, Financial) is $8.33 with a high estimate of $30.00 and a low estimate of $2.00. The average target implies an upside of 99.19% from the current price of $4.18. More detailed estimate data can be found on the Fluence Energy Inc (FLNC) Forecast page.
Based on the consensus recommendation from 25 brokerage firms, Fluence Energy Inc's (FLNC, Financial) average brokerage recommendation is currently 2.6, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Fluence Energy Inc (FLNC, Financial) in one year is $28.04, suggesting a upside of 570.81% from the current price of $4.18. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Fluence Energy Inc (FLNC) Summary page.
FLNC Key Business Developments
Release Date: February 11, 2025
- Revenue: $187 million, a decrease of 49% from the same quarter last year.
- Adjusted Gross Margin: 12.5%.
- Backlog: Record $5.1 billion.
- Order Intake: Over $770 million for the quarter.
- Annual Recurring Revenue (ARR): $106 million, up $6 million from the previous quarter.
- Total Cash: Over $650 million at the end of the quarter.
- Fiscal Year 2025 Revenue Guidance: Revised to $3.1 billion to $3.7 billion, midpoint $3.4 billion.
- Adjusted EBITDA: Negative $50 million for the quarter.
- Pipeline: Increased by $500 million to $21.4 billion.
- Liquidity: Total liquidity over $1.1 billion, including $654 million in cash and $458 million available under revolver and supply chain facilities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Fluence Energy Inc (FLNC, Financial) has achieved a record backlog of $5.1 billion, providing strong visibility for future revenue growth.
- The company reported an increase in annual recurring revenue (ARR) to $106 million, with a target of $145 million by the end of the fiscal year.
- Fluence Energy Inc (FLNC) ended the quarter with over $650 million in total cash, positioning it well for continued investment and value delivery.
- The company is launching a new product platform that promises industry-leading density and reduced total cost of ownership for customers.
- Fluence Energy Inc (FLNC) has a strong US domestic content strategy, which helps mitigate geopolitical risks and enhances competitiveness in the US market.
Negative Points
- Revenue for the first quarter was $187 million, a significant decrease from the previous year, attributed to a back-end-weighted fiscal plan.
- The company reduced its fiscal year 2025 revenue guidance by $600 million due to delays in signing contracts for three projects in Australia.
- Competitive pressures, particularly from Chinese players, are exerting significant pressure on pricing and margins.
- Fluence Energy Inc (FLNC) reported a negative $50 million adjusted EBITDA for the quarter, reflecting uneven distribution of operating expenses.
- The company has narrowed its gross margin expectations to 10% to 12% due to competitive pressures and tariffs, down from the previous range of 10% to 15%.
