Fluence Energy FLNC, a provider of battery energy storage systems, software and services for renewable and grid applications. Is a key member of the Zacks Alternate Energy - Other industry.
The company is being plagued by delays with respect to project deliveries. Fluence Energy expects that $400 million in project deliveries will be delayed into fiscal 2027 due to production issues at a new international contract manufacturing facility and construction-related delays that affected the completion and start-up of a new U.S. contract manufacturing facility. As a result, revenues for fiscal 2026 are now expected in the band of $2.9-$3.1 billion compared with the prior guided range of $3.2 billion to $3.6 billion.
Adjusted EBITDA is now expected in the range of negative $30 million to positive $10 million, previously anticipated in the band of $40-$60 million. This reduction reflects the downbeat revenue outlook and an approximately $15 million upfront cost associated with a planned agreement for long-term international battery supply.
Delays in project deliveries could weaken Fluence Energy’s near-term revenue growth, as reflected by the reduced guidance, by postponing milestone-based revenue recognition and customer payments. Such delays may also increase labor, logistics and storage costs, pressure margins and extend the cash-conversion cycle, particularly if the company must absorb cost overruns or pay contractual penalties. Persistent execution issues may make it harder to secure new contracts. Together, these factors could create earnings volatility and constrain the company’s ability to convert its project backlog into profitable growth.
Taking a Look at Other Players Facing Similar Headwinds
Project delivery delays may hurt Stem STEM, a global leader in clean energy software and services, by postponing hardware sales and the activation of recurring software and services contracts tied to operating assets.
Delays may also raise procurement and installation costs, weaken cash collection and reduce near-term revenue visibility. Stem incurred $1 million of excess supplier costs in 2024 because of production delays, illustrating how execution setbacks can directly pressure profitability. Extended delays could also frustrate customers and weaken Stem’s ability to convert bookings into operating assets and recurring revenues.
Energy Vault Holdings’ NRGV results are highly sensitive to the timing of equipment deliveries, construction, permitting and grid interconnections because revenues and margins are recognized as project milestones are completed. Delivery delays can shift Energy Vault’s revenues between periods, postpone cash receipts and recurring income from company-owned assets, and create construction cost overruns. The delays atEnergy Vault are likely to cause quarterly results to fluctuate significantly and delay the conversion of backlog into revenues, making its growth and profitability trajectory less predictable.
FLNC’s Share Price Performance, Valuation and Estimates
Shares of FLNC have declined in double digits (% wise) over the past six months. Consequently, FLNC’s shares underperformed its industry over the same time frame.
6-Month Price Comparison
Image Source: Zacks Investment Research
From a valuation standpoint, FLNC trades at a 12-month forward price-to-sales of 0.49X. FLNC trades at a discount compared with its industry.
See how the Zacks Consensus Estimate for FLNC’s earnings has been revised over the past 90 days.
FLNC’s Zacks Rank
FLNC currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Fluence Energy, Inc. (FLNC): Free Stock Analysis Report
Stem, Inc. (STEM): Free Stock Analysis Report
Energy Vault Holdings, Inc. (NRGV): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).