Fluence Energy, Inc.
Investment Thesis
Over a 3-5 year horizon, Fluence Energy will deliver significant revenue growth and improve profitability by capitalizing on global renewable energy expansion and US policy tailwinds, while navigating supply chain complexities and governance scrutiny.
Assumptions
Achieve sustained revenue growth exceeding 20% annually through FY2028, supported by a growing backlog (>$5.3B as of Sep 2025) and increased order intake driven by the US Inflation Reduction Act (IRA) and accelerating renewable energy deployment.
Gross profit margin will recover to at least 10% by FY2027, driven by improved component cost management, an increased mix of recurring service revenue, and pricing adjustments on new contracts, offsetting historical compression from volatile input costs.
Maintain a debt-to-equity ratio below 1.0x through FY2028, supported by improving cash flow generation from higher revenue volumes and services, avoiding significant new debt issuance despite ongoing capital expenditure.
Capital expenditures will remain elevated but stable relative to revenue in the next 18-24 months, focused on expanding US manufacturing capacity to meet demand driven by IRA incentives and mitigate supply chain risks.
No further material adverse findings emerge from the SEC investigation or shareholder lawsuits, and no new regulatory actions or significant governance failures occur, allowing management to execute its growth strategy without existential disruption.