Fluence Energy Could Be a Multi-Bagger Play in Energy Technology

Key Points

• Fluence Energy is one company standing in the eye of the electricity shortage storm, primarily as data centers draw more power.
• The company's business is a mix of hardware and software, which exposes it to high growth and high valuations in the future.
• Goldman Sachs analysts recently boosted their ratings and price targets on the stock, seeing strong financial growth.

Fluence Energy Inc. NASDAQ: FLNC has locked in nearly $5 billion in backlog bookings, much of it from new markets outside the United States. That international demand highlights the company’s global reach, but even domestically, the setup for energy storage is becoming more urgent.

In several U.S. cities, electricity prices are rising quickly—and the main cause is the increase in data center building and usage. These facilities are drawing more energy than local grids can supply, causing monthly bottlenecks that raise costs.

While long-term solutions like nuclear power are being debated, the more immediate fix lies in improved energy efficiency and advanced storage capabilities. That’s where Fluence comes in.

Far from just a hardware company, Fluence plays a critical role in grid optimization and battery storage. And with exposure to the software-as-a-service (SaaS) segment, which is a rarity in the energy space, it has the potential to command a significantly higher valuation multiple. Investors may want to keep FLNC stock on their radar for potential upside.

Breaking Down the Fluence Energy Moat

In the United States, Fluence Energy offers its Gridstack Pro storage services, which are already operational in several states and support a few companies in their energy solutions. These are longer-term contracts that are unlikely to be broken anytime soon, providing a direct moat to the current business and a path to potential renewals in the future.

Of course, this stability and recurring revenue stream add to the business's attractiveness, translating to a higher potential premium in valuation multiples. Before investors consider the market’s opinion about this premium, here are a couple of other fundamental points to consider.

Electricity absorption in cities like Dallas, Chicago, Austin, Atlanta, and others reports a historic low in capacity availability. This is likely the driver behind higher costs, but it is not an issue exclusive to the United States.

Some European regions are on the same trajectory, such as Poland and Germany, which have sought Fluence Energy’s help to resolve this current bottleneck and drive up a backlog of new bookings to a high of $4.9 billion, showing market share expansion and adoption routes into other markets that face a similar bottleneck issue.

Then comes the software side of the business, with offerings like Mosaic and Fluence IQ driving annual recurring revenue (ARR) figures higher on this new adoption. While the company is primarily exposed to its hardware services, this software blend also exposes it to higher growth rates and valuation multiples, especially as investors continue to prefer technology exposure in their portfolios.

This business model satisfies that preference and also provides a fantastic risk-to-reward ratio. The stock now trades at only 55% of its 52-week high, pricing in most potential bear cases while leaving investors with a massive upside gap to be filled in the coming quarters.

A Few Bullish Factors

While the consensus Wall Street price target is $8.98 per share, October 2025 surprised the markets when Brian Lee from Goldman Sachs decided to boost his rating on Fluence Energy stock to a Buy. Alongside this boost came a price target increase from $10 per share to $15, indicating 15.3% upside potential from today’s prices.

As bullish as this may seem, the new price target is still well below the stock’s 52-week high of $24 per share, indicating that there is still considerable room for a rally beyond what this analyst currently sees. Investors need to remember that analysts rarely begin to back a stock with such bearish price action, so even this $15 target is enough of a bullish signal.

The valuation multiples provide insight for the market’s direct assessment of this company. Because Fluence Energy trades at a price-to-cash (P/C) ratio of 58.8x today, markets value its future cash flows much higher than the energy sector’s average P/C multiple of 36.5x.

This premium could be driven by pricing power as the utilities sector becomes increasingly desperate for a solution amid rising utilization rates or by the software mix in this business, which makes it more attractive to most investors. Last but not least, Wall Street analysts have also laid out the catalysts.

Fluence Energy is expected to report earnings per share (EPS) of 29 cents by the fourth quarter of 2025, a significant jump from today’s net loss of two cents per share, enough to carry this stock closer to its 52-week high of $24 sooner rather than later.