Forgent Power Solutions, Inc.
Orin's own judgment of how firmly the evidence points one way — not the chance the price goes up.
Forgent Power Solutions is delivering extraordinary growth — FY2025 revenue nearly doubled to $1.42B with operating margin expanding to 16.1% from 9.6%, and the company has beaten EPS estimates three quarters running (most recently $0.25 actual vs. $0.24 estimated as of 15 Sep).
However, the stock at $31.68 still trades at 111.4x trailing P/E and 37.0x EV/EBITDA — a 254% and 71% premium to peer medians respectively — while free cash flow remains negative at -$30.3M on $115.9M of capex and total debt sits at $703.8M against $564.3M of equity. The recent pullback from prior levels (RSI at 37.1, below the 50-day MA of $35.32) has improved the risk/reward, but the valuation still prices in flawless execution of the data-center demand cycle with no room for error.
What could go wrong
- Valuation compression. At 111.4x P/E and 37.0x EV/EBITDA versus peer medians of 31.5x and 21.6x, any deceleration in revenue growth or margin expansion could trigger a sharp de-rating.
- Negative free cash flow. FY2025 FCF of -$30.3M with $115.9M capex and $703.8M total debt against $564.3M equity means the company is funding growth with leverage; sustained capex needs could pressure the balance sheet.
- Gross margin compression. Gross margin declined from 37.4% in FY2023 to 31.4% in FY2025 despite revenue scaling, suggesting cost pressures or mix shifts that could limit profitability upside.
- Demand cycle risk. The thesis depends on continued data-center and AI infrastructure spending; any slowdown in hyperscaler capex would directly impact the record backlog conversion.
What would change my mind
Where this comes from: FY25 fundamentals · peer comparison · earnings vs estimates · technicals, 16 Oct. Orin's read on FPS; not advice.
How has the share price moved?
Down 6.9% since its first close on file, from $29.00 on 5 Feb 2026 to $26.99 at the Tue 27 Oct 2026 close. Its highest close in that time was $64.59 on 4 Jun 2026; the last close is 58.2% below it.
- It listed on 5 Feb 2026, so the line starts there.
- The 50-day average starts on 17 Apr 2026, once there were 50 trading days to average.
- Green line: the closing price each trading day.
- Grey line: the average closing price over the last 50 trading days.
- Bars along the bottom: shares traded each day — green when it closed higher than the day before, rose when lower (the most, 44.4M, on 22 Oct 2026).
- Flags: the company's filings, on the day they were made (a 10-Q is the quarterly report and a 10-K the annual report; an 8-K reports a major event).
On file
All FPS filings| Form | Filed | What it says | Read |
|---|---|---|---|
| 8-K | 22 Oct | — | on file |
| 8-K/A | 22 Oct | — | on file |
| 8-K | 22 Oct | — | on file |
| 10-K | 15 Sep | Forgent Power Solutions, Inc. is a leading designer and manufacturer of electrical distribution equipment used in data centers, the power grid, and energy-intensive industrial facilities. | read |
| 8-K | 15 Sep | Forgent Power Solutions, Inc. filed a Form 8-K on September 15, 2026, triggering Items 2.02 and 9.01, to announce its financial results for the fourth quarter and fiscal year ended June 30, 2026. | read |
| 13G | 14 Aug | — | on file |
| 13G/A | 13 Aug | — | on file |
| 8-K | 26 Jun | Forgent Power Solutions, Inc. (FPS) subsidiary Forgent Power LLC entered into Amendment No. 1 to its Credit Agreement on June 23, 2026. | read |
Largest holders · 13F Q2 2026
Money flow| Filer | Position | Of fund |
|---|---|---|
| Coatue Management | $1.1B | 2.4% |
| FMR | $587.0M | 0.0% |
| Invesco | $399.1M | 0.0% |
| BlackRock | $372.4M | 0.0% |
| Vanguard Capital Management | $317.6M | 0.0% |
| Franklin Resources | $288.0M | 0.1% |
| Vanguard Portfolio Management | $272.9M | 0.0% |
| BAMCO | $227.5M | 0.3% |
| Zimmer Partners | $126.9M | 2.9% |
| Geode Capital Management | $125.4M | 0.0% |
77 of the 815 filers we track · quarter ended Q2 2026 · positions, not flows
Ask Orin about FPS
Orin answers questions about FPS from its filings, transcripts and numbers — with the source behind every claim. Your own desk starts with 3 free days, card required.
Start 3 free days →How is it priced, against its own past and its sector?
Priced at 94.9× its last 12 months of profit (Tue 27 Oct close); the typical Industrials company on the NYSE is at 33.7×. It has too few years of its own for a usual level.
| Measure | Now | Its usual | Sector |
|---|---|---|---|
| P/E | 94.9× | — | 33.7× |
| P/S | 5.79× | — | — |
| EV/EBITDA | 37.0× | — | — |
| P/B | 14.6× | — | — |
- Listed on 5 Feb 2026 — earlier years are not shown.
- So it has no full fiscal year of its own on file yet — no usual level.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
P/S: the company's total market value divided by one year of revenue. Used when there is no profit to measure.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
P/B: the share price divided by the book value per share — what the company owns minus what it owes, as its accounts record it. When book value is tiny, P/B swings wildly and says little.
What do the analysts who cover it publish?
The analysts' average 12-month price target is $52.60 (from $36 to $63) — 95% above the Tue 27 Oct close price. That is their published opinion, not Orin's.
$52.60
$36 – $63 · +95% against the last close
- 7 buy or overweight
- 1 hold
- 0 underweight or sell
Price target: the share price an analyst publishes for about 12 months ahead. It is the opinion of the firm that wrote it; the average is across the firms that cover the company.
Overweight / underweight: analysts' rating words: overweight means the firm expects the stock to do better than the others it covers, underweight worse. Their words, not Orin's.
How is it priced next to the companies it is compared to?
Priced at 94.9× its last 12 months of profit. Only 2 of the 3 companies it is compared to made a profit (POWL 30.7×, VRT 46.1×), so there is no typical P/E.
| Company | Market value | P/E | EV/EBITDA | Gross margin | Net margin | ROE |
|---|---|---|---|---|---|---|
| FPSForgent Power Solutions, Inc. | $8B | 94.9× | 37.0× | 31.4% | 5.8% | 18% |
| ATKRAtkore Inc. | $3B | lost money | n/m | 19.6% | −5.5% | −12% |
| POWLPowell Industries, Inc. | $6B | 30.7× | 21.1× | 30.1% | 16.5% | 28% |
| VRTVertiv Holdings Co | $80B | 46.1× | 31.7× | 38.0% | 15.1% | 42% |
- ATKR: lost money over the last 12 months, so no P/E.
- ATKR: EV/EBITDA is not meaningful (n/m) — its cash exceeds its market value plus debt, or the business lost money before depreciation.
- The list of companies is the data vendor's choice, so it can include a company a person would not have picked.
Market value: the share price times the number of shares — what the whole company is priced at.
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
EV/EBITDA: the price of the whole company (its shares plus its debt, minus its cash) divided by one year of operating profit before interest, tax and write-downs.
Gross margin: the share of each $1 of sales left after the direct cost of making what was sold.
Net margin: the share of each $1 of sales kept as profit after every cost. Below zero, the company lost money.
ROE: return on equity: one year of profit as a share of the shareholders' money in the business (its book value).
Is it priced high or low compared with its own past?
Priced at 94.9× its last 12 months of profit (Tue 27 Oct close). It has no full fiscal year on file since its history starts, so there is nothing of its own to compare with.
- Now94.9×
P/E: the share price divided by one year of profit per share — roughly how many years of today's profit the price pays for. A company that loses money has no P/E.
Fiscal year (FY): the company's own 12-month accounting year, which need not match the calendar year.
How has its sector been priced?
Industrials companies on the NYSE were priced at a typical 33.7× their yearly profit (Tue 27 Oct close).
- Now33.7×
- Each year is the middle of that calendar year's daily sector P/E; "Now" is the Tue 27 Oct close figure, the same one in the table above.
Sector P/E: the middle P/E of the companies in the same sector on the same stock exchange, as the data vendor works it out each day.
What does a cash-flow model say a share is worth?
A standard cash-flow model puts it at $5 a share — 81% below the $26.68 price it was computed against (27 Oct).
| Model | Value a share | Against the price then |
|---|---|---|
| Standard | $5 | 81% below $26.68 |
| Levered | $2 | 93% below $26.68 |
Discounted cash flow: a model's estimate of what the company is worth today, from the cash it is forecast to make in future years. Small changes in the forecast move it a lot, and it says little about a company that loses money.
Standard / levered: two versions of the cash-flow model: the standard one counts the cash before the company pays its lenders, the levered one after.