Fluence Rises as Renewable Energy Storage Leader, CEO Claims Profitability in Sight

Strong Demand and Profitability on the Horizon

Energy storage leader Fluence is seeing strong demand from the power hungry utility sector and will become profitable this year according to CEO Julian Nebreda. Despite reporting a net loss in its most recent quarter Fluence's shares surged 13% this week. The company recorded a record quarterly intake of $1.1 billion boosting its contracted backlog to $3.7 billion. Nebreda stated that Fluence is preparing for "hypergrowth" as wind and solar power play a growing role in the U.S. power grid.

Balancing Supply and Demand with Energy Storage

Fluence's technology helps balance supply and demand by storing energy for later use. Nebreda emphasized the importance of this technology in maximizing the benefits of renewables as solar energy is collected during the day but consumption typically peaks in the evening. By storing energy Fluence ensures that renewable energy sources can provide consistent power throughout the day.

Positive Financial Outlook

Fluence swung to a net loss in the last quarter of 2021 but reported a lower loss compared to the previous year. The company's gross profit margin is now in the double digits at 10.5%. Nebreda predicts that as revenue increases throughout the year Fluence will become profitable for the full year. The company expects significant earnings before interest taxes depreciation and amortization in 2024.

Ownership and Stock Performance

Fluence was founded in 2018 by Siemens and AES and it went public in October 2021. The stock initially performed well but has since declined by 36%. Siemens and AES still own 29% each with the Government of Qatar holding an 8% stake. Despite the stock's recent decline Wall Street analysts remain bullish on Fluence with 73% rating it a 'buy' and an average price target suggesting a 43% upside from the current price.

Growing Demand for Energy Storage

According to industry data demand for energy storage is expected to grow at a compound annual rate of 27% over the next six years reaching 150 gigawatt hours by 2030. Fluence highlights the immense potential of this demand noting that it could power 15 million households for one year based on average consumption. CEO Nebreda affirms that Fluence is strategically positioned to take advantage of this growth.