FPS Stock Forecast & Price Target

Forgent Power Solutions is supported by exceptionally strong end-market exposure, with about 75% of sales tied to data center and utility demand, where customization, lead-time advantages, and cross-selling are driving customer wallet share gains. It delivered a powerful F4Q26 beat with revenue of $462M, adjusted EBITDA of $113M at a 24.4% margin, bookings of $1,503M, and backlog of $3.02B, while guiding FY27 revenue to $2,400-2,700M and EBITDA to $575-625M. The company’s modular Powertrain Solutions segment is scaling quickly, management is expanding capacity in Tijuana, and free cash flow inflection in FY27 should create capital for prioritized M&A while margins expand over time.

Forgent Power Solutions is exposed to a fragile demand backdrop because its long-term growth thesis depends heavily on the data center investment cycle tied to AI adoption, and any slowdown in data center capex could also weaken grid-related sales. Near term, accelerated hiring creates a $10M EBITDA headwind in F1Q, even as management guides to about 200bps of q/q margin expansion in F2Q, which suggests profitability is being pressured to support orders and capacity. The stock also faces execution, capacity-ramp, and competitive risks from larger peers like ABB, Eaton, Schneider, and GE-Vernova, while a conservative leverage profile and >$213M implied FY27 cash flow guide do not eliminate these fundamental uncertainties.