Forgent Power Solutions (FPS) is expected to benefit from stronger data center and grid demand, larger customer orders, longer backlog coverage and better operating leverage in fiscal 2027 and 2028, Oppenheimer said in a note Friday.
The firm said Forgent Power's ability to customize products, add capacity quickly and sell more across its customer base should support faster growth as customer spending is rising, with average spending over the past 12 months up 20% from the previous quarter to $1.5 million, and management expects average order size to keep growing.
Backlog visibility has improved to a range of 12 to 15 months from 9 to 12 months as customers engage earlier and place longer-cycle orders, while margin gains should continue, helped by lower selling, general, and administrative expenses as a share of sales, better volume absorption, and a more favorable product mix, Oppenheimer said.
Forgent Power raised its fiscal 2026 revenue guidance to $1.35 billion to $1.39 billion and adjusted earnings before interest, taxes, depreciation, and amortization guidance to $310 million to $320 million, both above prior guidance, according to the note.
Oppenheimer kept Forgent Power's outperform rating and increased the price target to $60 from $43.
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