Fluence Energy has gotten torched over the last six months - since January 2026, its stock price has dropped 21.3% to $17.19 per share. This may have investors wondering how to approach the situation.
Is there a buying opportunity in Fluence Energy, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.
Why Is Fluence Energy Not Exciting?
Even with the cheaper entry price, we’re sitting this one out for now. Here are three reasons why FLNC doesn’t excite us, plus one stock we’d rather own.
1. EPS Took a Dip Over the Last Two Years
Although long-term earnings trends give us the big picture, we like to analyze EPS over a shorter period to see if we are missing a change in the business.
For Fluence Energy, its two-year annual EPS declines of 3.6% mark a reversal from its (seemingly) healthy four-year trend. These shorter-term results weren’t ideal, but given it was successful in other measures of financial health, we’re hopeful Fluence Energy can return to earnings growth in the future.
2. Cash Burn Ignites Concerns
Free cash flow isn’t a prominently featured metric in company financials and earnings releases, but we think it’s telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
Fluence Energy’s demanding reinvestments have drained its resources over the last five years, putting it in a pinch and limiting its ability to return capital to investors. Its free cash flow margin averaged negative 12.1%, meaning it lit $12.07 of cash on fire for every $100 in revenue.
3. Short Cash Runway Exposes Shareholders to Potential Dilution
As long-term investors, the risk we care about most is the permanent loss of capital, which can happen when a company goes bankrupt or raises money from a disadvantaged position. This is separate from short-term stock price volatility, something we are much less bothered by.
Fluence Energy burned through $269.2 million of cash over the last year. With $412.9 million of cash on its balance sheet, the company has around 18 months of runway left (assuming its $398.8 million of debt isn’t due right away).
Unless the Fluence Energy’s fundamentals change quickly, it might find itself in a position where it must raise capital from investors to continue operating. Whether that would be favorable is unclear because dilution is a headwind for shareholder returns.
We remain cautious of Fluence Energy until it generates consistent free cash flow or any of its announced financing plans materialize on its balance sheet.
Final Judgment
Fluence Energy isn’t a terrible business, but it isn’t one of our picks. After the recent drawdown, the stock trades at 27.6× forward EV-to-EBITDA (or $17.19 per share). Investors with a higher risk tolerance might like the company, but we don’t really see a big opportunity at the moment. We’re pretty confident there are superior stocks to buy right now. Let us point you toward our favorite semiconductor picks and shovels play.
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