Key Points
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Forgent Power Solutions reported Q1 2027 financial results this morning.
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The company reported record quarterly revenue.
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Management projects revenue will grow about 80% year-over-year in fiscal 2027.
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While the market is largely focused on Jensen Huang today, investors are also allocating some bandwidth to companies reporting financial results, such as Forgent Power Solutions (NYSE:FPS), which posted first-quarter 2027 results this morning before the market opened.
As of 2:05 p.m. ET, shares of Forgent Power Solutions, a developer of electrical distribution equipment used in data centers and other industrial applications, are down 8%, while the S&P 500 is down 0.2%.
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$479M in Q1 revenue falls short of analysts’ expectations
Setting a new company record for quarterly revenue, Forgent Power Solutions reported $479 million on the top line for Q1 2027. While it represented a new high-water mark for the company, it failed to impress investors, who seemed more concerned that it came up short of the $461 million analysts anticipated.
Another source of concern on the income statement was the company’s gross profit. Although Forgent Power Solutions increased its gross profit to $158.3 million in Q1 2027 from $98 million in Q1 2026, its gross profit margin contracted to 33.1% in Q1 2027 from 34.6% in Q1 2026.
With respect to fiscal 2027, management projects revenue of $2.45 billion to $2.65 billion and adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $587 million to $637 million.
Forgent Power Solutions positions itself as one of only a few companies capable of manufacturing the full range of electrical distribution equipment required for data centers or large manufacturing facilities, distinguishing itself by offering greater customization and shorter lead times than its peers.
Is Forgent Power Solutions stock a buy after today’s sell-off?
While shares of Forgent Power Solutions are dipping today, it’s important to recognize that the company reported a pretty successful quarter, and this industrial stock is certainly worthy of further investigation.
Granted, the contraction in the company’s gross profit margin is worth keeping an eye on, but its revenue growth is noteworthy, as is management’s belief that revenue and adjusted EBITDA will rise year-over-year by about 80% and 90%, respectively.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Forgent Power Solutions. The Motley Fool has a disclosure policy.
