On Thursday, Piper Sandler maintained its Neutral rating on Fluence Energy Inc. (NASDAQ:FLNC) with a steady price target of $18.00. The firm acknowledged Fluence's advantageous position due to its supply agreement with AESC, which is expected to improve margins as domestic content increases and shipments rise.
Despite the potential impact of Section-301 tariffs due to Fluence's reliance on Chinese cells, the company is exploring non-Chinese supply options to mitigate this risk.
Fluence's backlog has been adjusted to account for risks, and its strategy of partnering with premium players and focusing on international markets is believed to provide a buffer against bottlenecks. The company has secured 90% of its Fiscal Year 2024 revenues, although it has kept its full-year guidance unchanged, as some projects are close to conversion.
There is some investor skepticism regarding Fluence's ability to meet its guidance, given the significant increase in activity expected in the fourth quarter. However, Fluence is confident that it has the necessary logistics, production lines, and contractual backstops in place.
The company remains optimistic about the growth potential for energy storage over the next decade and beyond. Piper Sandler's report reflected a positive outlook on Fluence's margin improvement, handling of bottlenecks, and project pipeline conversion.
However, the firm expressed caution, suggesting that revenue projections through Fiscal Year 2025 might be overly ambitious.
InvestingPro Insights
Fluence Energy Inc. (NASDAQ:FLNC) is navigating an intriguing period, with a market capitalization of $3.6 billion and recent performance metrics that investors may find noteworthy. According to real-time data from InvestingPro, the company has experienced a strong return over the last month, with a 23.4% increase, and an even more impressive three-month price total return of 39.07%. This suggests a positive short-term investor sentiment despite the company not being profitable over the last twelve months, as indicated by its negative P/E ratio of -43.8.
InvestingPro Tips reveal that analysts expect net income growth and sales growth in the current year for Fluence, which could be a sign of the company's potential to improve its financial health. However, it should be noted that 7 analysts have revised their earnings downwards for the upcoming period, which may warrant caution. Additionally, the company holds more cash than debt on its balance sheet, which could provide financial flexibility in its operations and strategic initiatives.
For those interested in a deeper analysis, InvestingPro offers more tips that could guide investment decisions. With the use of coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access these insights. Currently, there are 12 additional InvestingPro Tips available for Fluence, which could provide further clarity on the company's financial health and stock performance.
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