Energy storage company Fluence Energy (NASDAQ: FLNC) lost more than expected in the quarter and lowered its outlook for 2025. Investors are stampeding for the exits, sending Fluence shares down more than 40% as of 9:45 Eastern.
Customer-driven delays
Fluence specializes in utility-scale energy storage projects. The company builds out massive arrays of batteries designed to store energy for future use. The projects are large and expensive to build but should create the foundation needed for renewables like solar to take a bigger role in supplying energy to the grid.
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But the company's fourth-quarter report provided little reason for investor optimism. Fluence lost $0.32 per share on sales of $186.8 million, well short of the $0.22-per-share loss on sales of $373 million that Wall Street had expected. Revenue was down 49% year over year, which the company attributed to delays in getting new projects started.
"We have experienced customer-driven delays in signing certain contracts that, coupled with competitive pressures, result in the need to lower our fiscal year 2025 outlook," CEO Julian Nebreda said in a statement. "While these delays are disappointing, we continue to see a very robust utility-scale battery storage market globally and strong interest in our U.S. domestic content product offering in particular."
Fluence also cut its outlook for 2025 revenue to $3.1 billion to $3.7 billion, down from $3.6 billion to $4.4 billion. Wall Street had expected sales of $3.9 billion for the year.
Is Fluence stock a buy?
The potential demand for Fluence's core offering is real, but this quarter is sure to add to questions about Fluence's ability to execute and take advantage of that market. While some could view Tuesday's dramatic share price plunge as a buying opportunity, investors should be warned that the company will need time to reestablish its credibility with the financial community.
Even if Fluence can get its act together, questions about long-term pricing power are likely to remain. If so-called battery farms are as essential to a renewable grid as they appear, they run the risk of being commoditized as companies build out capacity.
It is best to take a wait-and-see approach to Fluence right now.
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Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Fluence Energy. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
