Shares of Fluence Energy FLNC have declined 52% over the past six months, underperforming the Zacks Alternate Energy - Other industry, as well as fellow industry players FuelCell Energy FCEL and GE Vernova GEV.
6- Month Stock Price Comparison
Shares of Fluence Energy have declined this year due to headwinds like battery oversupply fears, periodic execution delays and macroeconomic pressures. Despite the recent drop, Fluence Energy’s robust fundamentals can’t be ignored.
The pullback over the past six months might be an opportune moment for long-term investors to buy FLNC’s shares. Currently priced at $13.93, the stock is 56% below its 52-week high, leaving ample room for growth.
Reasons Why We Remain Bullish on FLNC Stock
Growing Utility-Scale Energy Storage Demand: Fluence Energy stands to benefit from the accelerating global adoption of battery energy storage systems, driven by the rapid expansion of renewable energy generation and increasing electricity demand. As utilities integrate more solar and wind capacity into the grid, the need for large-scale storage solutions to balance intermittent power generation and maintain grid reliability continues to rise.
Strong Backlog Position: The company is already witnessing these favorable trends in its business. Management noted that accelerating utility demand, industrial electrification and data-center growth have expanded its sales pipeline. In the second-quarter fiscal 2026 conference call, management stated that the data center pipeline expanded 30% compared with the fiscal first quarter. Moreover, backlog climbed to record levels of approximately $5.6 billion.
Fluence Energy reaffirmed its fiscal 2026 guidance. The fiscal 2026 guidance is covered by backlog, providing strong revenue visibility. Management expects annual recurring revenues to reach approximately $180 million by the end of fiscal 2026, up from $148 million in fiscal 2025. Adjusted EBITDA is still expected in the range of $40-$60 million for fiscal 2026.
AI Data Centers Boosting Growth Potential: The rapid build-out of AI data centers is emerging as another powerful tailwind for Fluence. AI facilities require highly reliable, flexible power systems capable of handling sudden fluctuations in electricity demand. Battery energy storage systems help stabilize voltage and frequency, reduce peak demand and support uninterrupted operations, making them an increasingly essential component of next-generation AI infrastructure.
The company has recently signed master supply agreements with two major hyperscale data-center operators and expects initial orders to follow shortly. These MSAs established Fluence as a qualified supplier, positioning us to build on expected near-term data center projects for both hyperscalers. The company’s Smartstack platform has been developed to address AI-related power requirements.
Decent Earnings Surprise History: The company surpassed the Zacks Consensus Estimate for earnings in two of the last four quarters, missing once and reporting in-line earnings on the other occasion. The average beat is 18.1%.
Fluence Energy Price and EPS Surprise
Fluence Energy price-eps-surprise | Fluence Energy Quote
Fluence Energy’s Shares Are Cheap: The stock is undervalued compared with its industry. It is currently trading at a price-to-sales multiple of 0.61, lower than the industry levels. FuelCell Energy and GE Vernova trade at much higher levels. FuelCell Energy has a Value Score of F, while Fluence Energy and GE Vernova each have a value score of D.
Valuation Picture
FLNC Is Still a Solid Pick
Based on the abovementioned tailwinds, investors should consider parking their cash in FLNC despite the recent price weakness. The company currently carries a Zacks Rank #2 (Buy).
The Wall Street average target price of $18.89 for FLNC stock suggests an upside of more than 35% from the current levels.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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