FLNC - Fluence Energy: Caught In The Crossfire Why I Am Not Investing

2024-07-08 16:45:27 ET

Summary

• Fluence Energy began as a JV between Siemens and AES, floated in 2021. It has solid financials, growing revenue and positive cash flow.
• The utility-scale energy storage market is large and growing, but facing oversupply and price wars, with new tech companies challenging traditional lithium-ion solutions.
• Fluence faces challenges in delivering long-term shareholder value due to competition, potential future earnings misses, and legal issues.

Fluence Energy ( FLNC ) began as a JV between Siemens Energy (SMEGF) and The AES Corporation (AES). It was floated in 2021 and has been the beneficiary of orders and help from its two owners.

Fluence has a solid balance sheet, has increased its revenue significantly along with its gross margins, and has just begun generating positive free cash flow.

The market for utility-scale energy storage is large and growing, but so is the competition. There is evidence of oversupply triggering a price war among the big players, and smaller new tech companies are eating away at the green credentials of the larger lithium-ion solutions....

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