TLDR
- FPS reported Q4 revenue of $461.67 million, up 94.3% year over year, with EPS of $0.25 beating estimates
- TD Cowen raised its price target to $76, implying 141% upside from the current price of $31.45
- Fiscal 2027 guidance of $1.26–$1.40 EPS and $2.4–$2.6 billion revenue came in well above analyst expectations
- Forgent entered fiscal 2027 with a record backlog near $3 billion, including first orders from Frontier AI Labs
- The stock trades at a P/E of over 200 with a net margin of just 2.17%, raising questions about valuation
Forgent Power Solutions (NYSE: FPS) opened at $31.45 on Wednesday after reporting fourth-quarter fiscal 2026 results that beat on both the top and bottom lines. Revenue came in at $461.67 million, up 94.3% year over year. EPS of $0.25 topped the $0.24 consensus estimate.
Forgent Power Solutions, Inc., FPS
The strong print sent analysts scrambling to update their models. TD Cowen raised its price target from $73 to $76 and kept a “buy” rating on the stock, suggesting upside of over 141% from current levels.
KeyBanc also chimed in, reiterating its Overweight rating with a $60 price target. The firm pointed to data center and grid infrastructure demand as key drivers behind its conviction.
Forgent’s full-year fiscal 2027 guidance was a clear highlight. Management projected EPS of $1.26 to $1.40, against a consensus of $1.14. Revenue guidance of $2.4 to $2.6 billion was also well ahead of the $2.1 billion analysts had expected.
The midpoint of that revenue range implies growth of roughly 76% year over year. That is a bold target for any company, and Wall Street took notice.
Record Backlog and New Customer Wins
Perhaps the biggest signal came from the company’s backlog. Forgent entered fiscal 2027 with a record backlog near $3 billion, fueled by a 53% quarter-over-quarter jump in orders.
Forgent also secured its first direct orders and master service agreements with Frontier AI Labs and several hyperscalers. KeyBanc said these wins validate the company’s positioning in a competitive market.
First-quarter fiscal 2027 revenue guidance of $445 to $465 million was roughly in line with the $456.7 million consensus estimate, suggesting the big story is more about the back half of the year.
Options traders seemed to agree. Traders bought 21,324 call options, about 286% above average daily volume, pointing to strong directional interest in the stock.
Valuation Remains the Wildcard
The stock does not come without risk. FPS carries a reported P/E ratio of 209.69, a level that demands consistent execution.
Its net margin sits at just 2.17%, which is thin for a company trading at this kind of premium. Any shortfall against the aggressive growth outlook could lead to a sharp move lower.
Institutional interest has been growing. Several new positions were opened in the second quarter, including stakes from Tidal Investments, Scholtz and Company, and WINTON GROUP.
The overall analyst picture remains constructive. Of the 14 analysts covering FPS, ten have a buy rating, two have a hold, and one has a sell. The average price target sits at $57.00.
Zacks did cut the stock from strong buy to hold on September 8th, and Weiss Ratings downgraded it to sell in late July, so not everyone is on board.
The 52-week range for FPS is $25.95 to $66.00, and the stock is currently trading well below its highs. The 50-day moving average is $35.63 and the 200-day sits at $40.19.
Oppenheimer maintained its Outperform rating with a $60 price target following the earnings release.
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