Susquehanna upgrades Fluence Energy stock to Positive on recent price weakness By Investing.com

On Monday, Susquehanna upgraded shares of Fluence Energy Inc. (NASDAQ:) from Neutral to Positive while maintaining a price target of $24.

The firm’s decision comes after earlier acknowledging Fluence’s significant improvements in operational and financial performance over the last 12 to 18 months. At the time it assigned a Neutral rating due to valuation.

“However, recent price weakness, especially following a short report late last week, provides attractive risk/reward in our view, and hence, we™re moving to a Positive rating,” said the analyst.

The analyst cited multiple factors contributing to a favorable outlook for Fluence Energy, including the growth in utility solar, benefits from the Inflation Reduction Act (IRA), and declining lithium prices. These elements are seen as strong tailwinds for the energy storage market, with Fluence Energy poised to benefit from the increasing installations of batteries.

Fluence Energy’s demand has been robust, as evidenced by the fact that for nine consecutive quarters, the company’s order intake has surpassed its revenue. This trend underscores the strong market demand for storage products. Susquehanna projects that Fluence’s top-line revenue will grow by approximately 35% in fiscal years 2024 and 2025, aligning with the company’s own guidance.

The analyst also noted that while higher interest rates have had a negative impact on project economics, the cost of lithium, which can account for more than half of a utility-scale battery’s cost, has decreased by 80% over the past year. Although Fluence Energy has fixed prices for its contracted backlog, new contracts stand to benefit from the lower lithium prices, potentially bolstering the company’s growth trajectory.

InvestingPro Insights

Following Susquehanna’s upgrade of Fluence Energy Inc. (NASDAQ:FLNC) to Positive, recent data from InvestingPro underscores the potential that analysts see in the company. Fluence Energy’s market capitalization stands at a robust $2.57 billion, reflecting its significant presence in the energy storage market. The company’s revenue growth has been remarkable, with a 70.25% increase over the last twelve months as of Q1 2024. This aligns with Susquehanna’s expectations of strong top-line growth for Fluence in the coming fiscal years.

Despite the company’s negative P/E ratio of -33.92, which suggests that it is not currently profitable, analysts are optimistic about Fluence’s future. One of the InvestingPro Tips highlights that net income is expected to grow this year, and analysts predict the company will be profitable this year. This anticipated turnaround in profitability could be a driving factor for the positive sentiment surrounding the stock.

Moreover, another InvestingPro Tip worth noting is that Fluence Energy holds more cash than debt on its balance sheet. This financial stability, combined with the fact that the stock is trading near its 52-week low, could present an attractive entry point for investors. The company’s stock has experienced significant volatility, with price movements reflecting a high degree of investor sensitivity to market dynamics and news.

For investors looking for more in-depth analysis and additional metrics, InvestingPro offers a range of InvestingPro Tips, with 15 more tips listed for Fluence Energy. To access these tips and gain a comprehensive understanding of FLNC’s financial health and future prospects, visit https://www.investing.com/pro/FLNC. Don’t forget to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.

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