Last Update 20 Jan 26

Fair value Increased 14%

FLNC: Backlog And Datacenter Hype Will Constrain Future Return Potential

Analysts have lifted their price targets on Fluence Energy by a few dollars, reflecting updated fair value assumptions of about $17.13, along with refreshed views on revenue growth, profit margins, and a higher future P/E multiple supported by recent research commentary on execution, datacenter exposure, and backlog trends.

Analyst Commentary

Recent research updates on Fluence Energy focus on how the current execution story, datacenter exposure, and backlog trends line up with the refreshed fair value assumptions and updated price targets.

Bullish Takeaways

Bullish analysts highlight the solid Q4 and FY26 outlook as support for higher price targets, linking the updated fair value of about $17.13 to clearer revenue visibility and execution milestones.
The growing focus on datacenter related demand is seen as a key growth driver that could help support a higher future P/E multiple if Fluence converts this interest into profitable projects.
Backlog growth is cited as an important pillar for current valuations, with analysts pointing to the existing order book as evidence that revenue is not purely dependent on new wins.
Goldman Sachs and other bullish analysts raising price targets by a few dollars signal confidence that the current execution and margin trajectory can justify higher multiples over time.

Bearish Takeaways

Some cautious analysts emphasize that part of the revenue has been pushed to FY26, which may increase timing risk around growth and could limit how quickly higher price targets are realized.
Investor focus on execution is framed as a risk as much as an opportunity, since any slip in delivering projects or managing costs could pressure the assumed P/E multiple.
The reliance on backlog to support current valuations raises questions about how fast that backlog converts into cash flow and margin expansion, especially if project timelines stretch.
A Sector Perform rating from one major firm underscores that not all analysts see clear upside from current levels, with some waiting for more consistent delivery before endorsing richer valuation assumptions.

What's in the News

Fluence Energy will supply its Gridstack Pro energy storage solution to the Pioneer Clean Energy Center in Yuma County, Arizona, a project pairing a 300 MW ac solar facility with a 300 MW / 1,200 MWh battery system under a long term tolling agreement, using U.S. manufactured components to support domestic energy storage technology and U.S. energy security (Client Announcements).
Full on site construction at the Pioneer Clean Energy Center is underway, with commercial operation for the combined solar and storage facility expected by April 2027. This positions Fluence as a key supplier to a large scale Arizona grid reliability project (Client Announcements).
Phase 1 of the Sizing John Battery Energy Storage System near Liverpool, a 57 MW / 137.5 MWh project in the Mersey Ring, has entered full commercial operations using Fluence's Gridstack solution, providing longer duration storage intended to help ease regional grid congestion and price volatility (Product Related Announcements).
Varco has started Phase 2 of the Sizing John project and selected Fluence again, targeting a total 142.5 MW / 348.5 MWh system that will use next generation Gridstack Pro 5000 with grid forming capabilities to help regulate voltage and frequency in one of the UK's more constrained grid areas (Product Related Announcements).
Fluence has issued fiscal 2026 guidance for revenue of about US$3.2b to US$3.6b, with roughly 85% of the midpoint of this range covered by backlog as of 30 September 2025 (Corporate Guidance).

Valuation Changes

Fair Value: updated from about US$14.97 to about US$17.13, indicating a higher assessed equity value per share in the latest work.
Discount Rate: adjusted slightly from about 9.42% to about 9.46%, a small change in the rate used to discount future cash flows.
Revenue Growth: revised from about 27.44% to about 26.77%, pointing to a slightly more conservative top line outlook in the model.
Profit Margin: moved from about 2.63% to about 2.23%, reflecting a modestly lower margin assumption in future years.
Future P/E: lifted from about 21.47x to about 29.49x, implying a higher valuation multiple applied to projected earnings.

Accelerating global demand for grid-scale storage, policy incentives, and renewable integration position Fluence favorably for revenue growth and market share gains.
Strengthened domestic supply chains and next-generation products improve resilience, margins, and support order recovery amid easing market uncertainties.
Trade policy uncertainty, supply chain dependencies, rising competition, and policy shifts create significant risks to Fluence’s revenue, profitability, and backlog conversion timelines.

Catalysts

About Fluence Energy

Through its subsidiaries, provides energy storage and optimization software for renewables and storage applications in the Americas, the Asia Pacific, Europe, the Middle East, and Africa.What are the underlying business or industry changes driving this perspective?

Rapid global electrification and surging power demand—driven by data centers, transportation, and industrial sectors—are expected to sharply increase the need for grid resilience and flexibility, leading to substantial projected growth for large-scale battery storage. This expansion will drive material revenue growth for Fluence over the next several years.
Significant declines in battery costs (down ~70% since 2022) and continued cost reductions for renewable energy are accelerating renewable integration globally, boosting demand for storage solutions to manage grid intermittency—segments where Fluence’s products like Smartstack are well-positioned to capture market share, supporting both top-line growth and consistent gross margins.
Global policy momentum for decarbonization, local manufacturing incentives (e.g., US IRA content bonuses), and a multi-year surge in grid modernization investments are expanding addressable markets and providing a tailwind for project awards and recurring software/services revenues, enhancing both revenue visibility and long-term earnings quality.
Fluence's successful ramp of its US domestic battery supply chain (now able to blend and offer up to 100% domestically produced batteries) increases resilience against trade uncertainty, enables customers to claim subsidy incentives, and provides a sustainable cost advantage—key factors supporting future revenue recovery as present contract pauses due to tariffs are resolved.
The growing backlog exceeding $4.9 billion, expanding international pipeline, and initial traction for next-generation products (e.g., Smartstack) set the stage for an eventual rebound in order volumes, margin expansion from operational efficiencies, and a path back to positive free cash flow as uncertainty recedes and the storage market resumes robust growth.

Fluence Energy Earnings and Revenue Growth

Fluence Energy Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Fluence Energy's revenue will grow by 19.5% annually over the next 3 years.
Analysts assume that profit margins will increase from -0.8% today to 2.3% in 3 years time.
Analysts expect earnings to reach $97.9 million (and earnings per share of $0.51) by about September 2028, up from $-18.4 million today. However, there is a considerable amount of disagreement amongst the analysts with the most bullish expecting $128 million in earnings, and the most bearish expecting $-16.7 million.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 19.6x on those 2028 earnings, up from -48.0x today. This future PE is lower than the current PE for the US Electrical industry at 29.6x.
Analysts expect the number of shares outstanding to grow by 1.07% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 9.59%, as per the Simply Wall St company report.

Fluence Energy Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Persistent tariff and trade policy uncertainty—especially the sharp rise in U.S. tariffs on Chinese battery imports to 155%—has resulted in paused contract execution and a $700 million reduction in near-term revenue guidance, introducing risk to the timing and realization of future revenue and compressing EBITDA.
Ongoing industry reliance on Chinese cell production, with limited supply alternatives in Korea or Japan, exposes Fluence to future supply chain disruptions or unfavorable price shifts, which could negatively impact cost of goods sold and net margins if domestic capacity isn’t ramped quickly enough.
Elevated competitive intensity, particularly from international peers and Chinese firms in global markets, could drive pricing pressure or margin erosion, especially as most battery technologies commoditize and competitors attempt to replicate Fluence's product offerings.
Shifts in U.S. industrial policy—including potential implementation of FEOC (Foreign Entity of Concern) restrictions and reductions in government incentives—could threaten the cost competitiveness of Fluence’s domestic supply chain strategy, impacting both order volume and profitability in its largest market.
Repeated pauses or delays in large project contracts due to macroeconomic, policy, or supply chain uncertainties (including customer preferences to delay commitments until tariff stability returns) could result in longer sales cycles, deferred backlog conversion, and greater earnings volatility.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $7.737 for Fluence Energy based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $12.0, and the most bearish reporting a price target of just $2.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $4.2 billion, earnings will come to $97.9 million, and it would be trading on a PE ratio of 19.6x, assuming you use a discount rate of 9.6%.
Given the current share price of $6.75, the analyst price target of $7.74 is 12.8% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

Analysts Raise Fluence Energy Price Target Amid Mixed Sentiment and Strong US Market Position