Shares of battery storage systems maker Fluence Energy (FLNC +27.57%) plunged 48.7% this week, according to data from S&P Global Market Intelligence.
On Monday, the battery storage-maker reported fiscal first quarter earnings that highly disappointed investors and analysts, to say the least. On the heels of the massive miss and guidance cut, Wall Street sell-side analysts wasted no time in downgrading the stock and lowering their price targets.
NASDAQ: FLNC
Key Data Points
Fluence whiffs big time
In fiscal Q1, Fluence reported just $187 million in revenue and a loss per share of ($0.32). Those results missed estimates by a wide $186 million and $0.14, respectively. The revenue print was not only about 50% below estimates, but amounted to a 49% decline from the prior-year quarter.
Management also lowered its full-year 2025 revenue outlook to a range of $3.1 billion to $3.7 billion, down from the prior guide of $3.6 billion to $4.4 billion. It also lowered its full-year adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization) guidance to a range of $70 million to $100 million, down from its prior guidance of $160 million to $200 million.
Management cited customer delays in signing contracts as certain projects were pushed out in time, along with competitive pressures. That's obviously not a good combination. However, management also cited positives, such as a strong outlook for utility-scale solar battery storage around the globe, and keen interest in Fluence's U.S. content product, as well as with a $5.1 billion backlog.
However, Wall Street analysts weren't so optimistic. After earnings, UBS analysts cut their rating from Buy to Neutral and lowered their price target from $28 to $8. Wolfe Research downgraded shares from Outperform to Peer Perform, citing the potential for gross margins to decline from a 10% to 15% range to the lower end of that range on an ongoing basis. Roth Capital also cut its rating to Neutral, while giving Fluence a $6.50 price target.
Is Fluence a buy now?
Fluence's market cap has fallen to just $1.17 billion as of this writing. That seems fairly cheap for a company that's still projected to produce about $3.4 billion in revenue, even at the newly lowered guidance.
That being said, there's a lot of uncertainty here, as Fluence is still burning cash. So, for bargain-hunting value investors, Fluence is a name to put on the watch list, but perhaps not a buy just yet.
