Problems in Houston

Fluence Energy US Equity Research Sustainability 16 September 2026

Rating Price Target George Gianarikas | Analyst | Canaccord Genuity LLC (US) | | BUY US$15.00↓ Matt Paciulli | Associate | Canaccord Genuity LLC (US) | | unchanged from US$24.00 Jason Tilchen, CFA | Analyst | Canaccord Genuity LLC (US) | |

Price FLNC-NASDAQ US$9.05 Problems in Houston Fluence has a problem in Houston. Market Data 52-Week Range (US$) : 7.26 - 33.51 Avg Daily Vol (M) : 7.6 On Wednesday after the close, the company announced that a promised $3B Market Cap (US$M) : 1,670.0 F2026 revenue horizon abruptly shrank to $2.4B. At the heart of the storm lies the Shares Out. (M) : 143.2 Houston manufacturing facility, where CEO Julian Nebreda acknowledged the team fundamentally underestimated operational complexity. Welding automation failed under FYE Sep 2026E 2027E 2028E 2029E the strain, forcing a pivot to slower manual labor, while final assembly bogged down Sales (US$M) 2,398↓ 2,917↓ 4,441↓ 5,427↓ from skilled worker shortages until 3 Houston subcontractors were rushed in to share Previous 2,951 3,748 5,223 6,387 the load. Instead of humming along at an expected eleven units per day during the late EPS Adj&Dil (US$) (1.46)↓ (0.38)↓ 0.83↓ 0.99↓ summer ramp-up, the factory sputtered at a single unit daily before corrective measures Previous ( clawed it back to 3.

35 Of the $600M top-line haircut, $450M traces directly back to Houston's stumbles, 30 compounded by delivery bottlenecks and late shipments. Meanwhile, the $190 million bottom-line worsening was carved out by $130M in combined penalties and delayed 25 revenue shifted into F2027, alongside $60M in rollout and quality-standard costs.

20 So what to do with the stock?

15 We have long been advocates of Fluence’s stock, enamored by the growing demand 10 for energy storage in our current power boom. And most indications for Fluence’s leadership in that market have flashed green – reinforced by 2 hyperscaler MSAs 5 (master supply agreements). Emerging victorious from a 26-vendor gauntlet proves that, despite the stiff competition, Fluence’s solution has been validated in a crowded Oct-25 Nov-25 Dec-25 Jan-26 Feb-26 Mar-26 Apr-26 May-26 Jun-26 Jul-26 Aug-26 Sep-26 field. And specifically where quality of power appears to have been the key metric FLNC.US assessed by the hyperscalers. Russell 2000 (rebased) Source: FactSet But, persistent operational friction has snatched defeat from the jaws of victory. Priced as of close of business 16 September 2026 This news is undeniably disappointing, we are closely tracking market share dynamics to ensure these production snags do not drive customers toward competitors. We view this risk as relatively low, alternative solutions remain scarce in Western markets, and Fluence boasts a strong product, but vigilance is warranted.

So despite the snags and turbulence, we are sticking with the stock at these levels. We believe time will vindicate the thesis, unlocking compounding acceleration in EBITDA, free cash flow, and underlying earnings power.

We reiterate our BUY rating but are lowering our target from $24 to $15. Our target is based on ~17x our F2028E non-GAAP EPS of $0.83 (from $1.20). Fluence's peers trade at a median of ~17x Factset 2028E EPS.

Canaccord Genuity is the global capital markets group of Canaccord Genuity Group Inc. (CF : TSX) The recommendations and opinions expressed in this research report accurately reflect the research analyst's personal, independent and objective views about any and all the companies and securities that are the subject of this report discussed herein.

For important information, please see the Important Disclosures beginning on page 5 of this document.

Fluence Energy Lowering Target Price

FY2026 guidance lowered due to manufacturing delays in Houston facility. At market close last night, Fluence announced that the company lowered FY2026 revenue to $2.4B from the previously guided $3B. Additionally, Fluence lowered its FY2026 adjusted EBITDA guidance to a loss of ($200M) from its previous guidance of ($10M). Julian Nebreda, CEO, said, "we continue to experience delays in the ramp-up of our contract manufacturing facility in Houston…