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Fluence Energy (FLNC) stock crashed on Thursday morning after management lowered its outlook for the financial year.
It now sees revenue coming in at about $2.4 billion, down meaningfully from its previous guidance for $3 billion. The company also expects its adjusted EBITDA loss to expand to $200 million this year.
As investors reacted to the disappointing forecast, FLNC slipped decisively below its key moving averages (MAs), with an RSI in the low 20s indicating the stock is now deeply oversold.
While such a technical setup often triggers a near-term rally, there’s reason for discipline investors to still not touch Fluence Energy shares with a 10-ft pole.
Why Fluence Energy lowered its full-year guidance?
Fluence Energy trimmed its guidance mostly because of persistent manufacturing and supply chain bottlenecks.
Management cited severe delays in ramping its flagship contract manufacturing facility in Houston – which prevented the company from converting its record backlog into realized revenue.
Plus, project delivery delays totaling “hundreds of millions of dollars” are slipping out of this year and into fiscal 2027.
While FLNC has recently named a new Chief Operating Officer and announced restructuring plans to address these operational bottlenecks, execution risk remains elevated until it can demonstrate reliable delivery schedules and operational predictability.
This makes Fluence Energy stock rather unattractive to buy on the dip today.
Why FLNC shares are not worth buying on the dip
Beyond top-line manufacturing delays, Fluence Energy shares are a no-go because the company’s underlying financial health is weakening rapidly.
Gross margins have contracted sharply – falling to mid-single-digit in the latest reported quarter – due to initial platform deployment costs, supply chain friction, and upfront international battery supply commitments.
Combined with widening EBITDA losses, the firm’s net loss for the year is expanding significantly
For a growth-stage company navigating macro headwinds and elevated interest rates, continuous cash burn and negative earnings create a precarious environment.
Until FLNC can establish a clear path toward sustainable profitability and positive cash generation, buying the stock purely based on discounted valuation metrics carries substantial downside risk.
What Fluence Energy needs to recover
All in all, while an RSI in the lower 20s signals short-term technical relief as automated trading systems cover short positions, investors must separate technical noise from long-term fundamental value.
A low relative strength index simply reflects the speed and intensity of recent price declines – not an intrinsic signal that a business has turned a corner.
FLNC shares undoubtedly benefit from strong secular tailwinds in clean energy storage and data center power demand, but top-line potential is useless if operational missteps continuously erase profit margins.
Until management proves it can stabilize margins and execute cleanly on its $6.4 billion backlog, catching this falling knife remains an unnecessary risk.
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