Can FLNC Maintain Profitability?

Shares of Mid-cap None company Fluence Energy were up 2.8% during today's evening session, as the S&P 500 posted a 1.0% change. Today's upwards movement shows that investor interest in FLNC stock is strong -- but how closely have they studied the company's margins?

While Fluence Energy's gross margins for the last year are positive, we are concerned that the company's operating margins are in the red. Gross margins take into account only the cost of revenue, or variable costs -- meaning the cost directly associated with producing the products or providing the service offered by the company.

Operating margins, on the other hand, take into account the company's overhead as well. Overhead, also called fixed costs, includes the company's rent, salaries for personnel not included in cost of revenue, equipment and supplies, amortization, and depreciation. Operating margins tell you about how efficiently Fluence Energy is run, and gross margins tell you how profitable its product line is.

Date Reported Revenue ($ k) Cost of Revenue ($ k) Gross Margins (%) YoY Growth (%)
2023 1,851,406 1,841,182 1 120.0
2022 1,198,603 1,260,957 -5 50.0
2021 680,766 749,910 -10 -1100.0
2020 561,323 553,400 1

By reviewing several years of Fluence Energy's income statemet, we can see that, although gross margins are currently positive, the company has on average lost money on each of its sales with an average gross margin of -3.2%. Cost of revenue has been changing at a rate of 35.1%, while its revenues have a growth rate of 34.8%. As a result, gross margins have a delta of -13.9%.

Date Reported Total Revenue ($ k) Operating Expenses ($ k) Operating Margins (%) YoY Growth (%)
2023 1,851,406 134,062 -13 45.83
2022 1,198,603 116,710 -24 0.0
2021 680,766 38,162 -24 -242.86
2020 561,323 17,940 -7

The table above tells us that, on average, Fluence Energy has not been profitable over the last four years, which should be a warning sign to prospective investors. Indeed, the company's operating margins are sinking at rate of -16.6%

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.