Fluence Energy forecasts full-year revenue at low end of guidance; HSBC downgrades

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Fluence Energy (NASDAQ:FLNC [https://seekingalpha.com/symbol/FLNC]) +1.1% in Wednesday's trading, after shares had plunged by as much as 22% over two days, after reporting mixed Q3 results [https://seekingalpha.com/news/4483403-fluence-energy-gaap-eps-of-0_01-beats-by-0_03-revenue-of-602_53m-misses-by-157_96m] but anticipating full-year revenues will come in at the lower end of its $2.6B-$2.8B guidance range, while maintaining guidance of full-year adjusted EBITDA flat to $20M.

Q3 revenues rose 24% Y/Y to $602.5M but came in below expectations due to delays in ramping up new U.S. manufacturing facilities, which are expected to achieve targeted capacity by year-end 2025.

The results prompted HSBC to downgrade Fluence Energy (NASDAQ:FLNC [https://seekingalpha.com/symbol/FLNC]) to Reduce from Hold with a $5 price target, as slower than expected backlog conversion amid U.S. facility ramp delays drives meaningful cuts to FY 2026-27 estimates due to lower assumptions for volume, backlog conversion, and margins.

U.S. policy volatility has hurt energy storage market demand in the U.S. - ~45% of Fluence's (NASDAQ:FLNC [https://seekingalpha.com/symbol/FLNC]) total pipeline - and the U.S. market now must adapt to stringent domestic content requirements and remains highly reliant on Chinese cell imports, HSBC's Sean McLoughlin wrote, also noting that a stagnant U.S. energy storage market is increasing competition in other markets.

While additional equity is not expected to be needed, McLoughlin noted concerns over high cash burn YTD and the high costs of new debt instruments, placing emphasis on seamless execution in Q4 to avoid short-term issues.

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