Is FPS a Buy? What to Consider in 2026
Short answer
The bull case for Forgent Power Solutions (FPS) rests on Data-center and AI power demand: Forgent sells directly into the electrical backbone of AI data centers, which represent close to half of its pipeline. Revenue (fiscal Q3 2026, quarter ended March 31) is ~$379 million, up ~103% year over year. If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: Forgent is a niche, newly public company competing against far larger and more diversified electrical-equipment makers, which S&P Global analysts have noted leaves it more exposed to economic volatility. Whether FPS is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
Forgent Power Solutions, founded in 2023 and based in Dayton, Minnesota, designs and manufactures electrical distribution equipment used in data centers, the power grid, and energy-intensive industrial facilities. Its catalog spans four product families: transformers (padmount, substation, PDU, VPI), switchgear (low and medium voltage, paralleling), automatic transfer switches, and prefabricated solutions such as eHouses and power skids, plus aftermarket services like testing, modernization, and commissioning. Roughly 91% of fiscal 2025 revenue came from engineered-to-order work (about 78% Custom Products and 13% Powertrain Solutions), which the company positions as a differentiator against larger, more standardized rivals. Data centers make up a large share of demand (about 42% of fiscal 2025 revenue and roughly 47% of the order pipeline), with the grid around 30%, so its growth is tightly linked to AI-driven capital spending and electrification. The company went public on the NYSE in February 2026 at $27.00 per share, raising about $491.8 million in primary proceeds, and combined IPO and follow-on activity brought roughly $800.4 million of net proceeds in the quarter. Its private-equity backer, Neos Partners LP, remains a major holder and has participated in subsequent secondary offerings, including a roughly 35 million share sale announced in late June 2026 after the stock had roughly doubled from the IPO price. Forgent has been added to the Russell Midcap Growth benchmark. Management has framed the story as scaling capacity aggressively (it has said its expansion could support up to $5 billion in annual revenue) to meet backlog, while carrying about $600 million of debt against $1.85 billion of total assets as of March 31, 2026.
What's the case for buying FPS?
1. Data-center and AI power demand
Forgent sells directly into the electrical backbone of AI data centers, which represent close to half of its pipeline. As hyperscalers and developers race to add compute capacity, demand for transformers, switchgear, and transfer switches has outrun supply industry-wide. That tailwind drove fiscal Q3 2026 revenue up roughly 103% year over year to about $379 million.
2. Record backlog and bookings
The company reported roughly $867 million of bookings in fiscal Q3 2026 and a total backlog near $1.98 billion, giving multi-quarter revenue visibility. A large backlog can smooth results if it converts on schedule, though it also depends on customers not deferring or canceling orders if the AI capital-spending cycle cools.
3. Capacity expansion and operating leverage
Forgent is investing to expand manufacturing capacity, and management has said its footprint could eventually support up to $5 billion in annual revenue. Fiscal Q3 2026 adjusted EBITDA reached about $85 million on strong incremental margins. If utilization rises as new capacity comes online, profitability could scale, though the buildout requires capital and flawless execution.
4. Grid and electrification breadth
Beyond data centers, roughly 30% of demand comes from the power grid, with additional exposure to utilities and heavy industry. Aging grid infrastructure, reshoring, and electrification give Forgent end markets that are not solely tied to AI, which management frames as diversification even though data centers remain the largest single driver.
What are the risks to FPS?
Forgent is a niche, newly public company competing against far larger and more diversified electrical-equipment makers, which S&P Global analysts have noted leaves it more exposed to economic volatility. Heavy reliance on data-center demand ties its results to the AI capital-spending cycle, so a slowdown in hyperscaler or developer orders could hit bookings and backlog conversion quickly. The valuation is extreme, with a trailing P/E in the high hundreds, meaning the stock prices in years of continued rapid growth and leaves little room for disappointment. It also carries about $600 million of debt and depends on executing a large capacity expansion. Finally, its private-equity backer Neos Partners retains a substantial stake and has sold shares in secondary offerings, creating potential supply overhang on the stock.
How is FPS valued? (as of July 2026)
Snapshot for FPS as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (fiscal Q3 2026, quarter ended March 31): ~$379 million, up ~103% year over year
- Backlog / bookings: ~$1.98 billion backlog, ~$867 million quarterly bookings
- Net income (fiscal Q3 2026): ~$24 million
- Adjusted EBITDA (fiscal Q3 2026): ~$85 million
- P/E ratio: ~800x or higher (very low current earnings)
- Market cap: ~$13 to $15 billion (stock ~$50 per share)
Figures are approximate and tied to the asOf date; verify live numbers before acting. Forgent uses a fiscal year ending June 30, so its fiscal Q3 2026 covers the quarter ended March 31, 2026. Full-year fiscal 2026 guidance points to revenue of about $1.35 to $1.39 billion and adjusted EBITDA of roughly $310 to $320 million. The extremely high P/E reflects small current earnings against a large market cap, so the valuation leans on future growth rather than trailing profit.
How do you decide if FPS is a buy?
Rather than asking whether FPS is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold FPS indirectly through an index or sector ETF before adding more.
For the full picture, see the FPS stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about FPS against your real portfolio and see your actual exposure before deciding.
The bottom line on FPS
The bottom line: Forgent Power Solutions's story right now is Data-center and AI power demand, with revenue (fiscal q3 2026, quarter ended march 31) at ~$379 million, up ~103% year over year. If you believe that narrative continues, the call is about sizing FPS sensibly and checking overlap with what you own; if you doubt it (the risk: forgent is a niche, newly public company competing against far larger and more diversified electrical-equipment makers, which S&P Global analysts have noted leaves it more exposed to economic volatility.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
Build a basket around FPS with Walnut
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FAQ
Is FPS a good stock to buy right now?
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The case for Forgent Power Solutions right now is Data-center and AI power demand, with revenue (fiscal q3 2026, quarter ended march 31) at ~$379 million, up ~103% year over year. If you believe that thesis holds, FPS is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is forgent is a niche, newly public company competing against far larger and more diversified electrical-equipment makers, which S&P Global analysts have noted leaves it more exposed to economic volatility. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does Forgent Power Solutions do?
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Forgent Power Solutions, founded in 2023 and based in Dayton, Minnesota, designs and manufactures electrical distribution equipment used in data centers, the power grid, and energy
What are the main risks of FPS?
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Forgent is a niche, newly public company competing against far larger and more diversified electrical-equipment makers, which S&P Global analysts have noted leaves it more exposed to economic volatility. Heavy reliance on data-center demand ties its results to the AI capital-spending cycle, so a slowdown in hyperscaler or developer orders could hit bookings and backlog conversion quickly. The valuation is extreme, with a trailing P/E in the high hundreds, meaning the stock prices in years of continued rapid growth and leaves little room for disappointment. It also carries about $600 million of debt and depends on executing a large capacity expansion. Finally, its private-equity backer Neos Partners retains a substantial stake and has sold shares in secondary offerings, creating potential supply overhang on the stock.
What company is FPS?
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FPS is the NYSE ticker for Forgent Power Solutions, Inc., a Dayton, Minnesota company founded in 2023 that designs and manufactures electrical distribution equipment. Its products, including transformers, switchgear, automatic transfer switches, and prefabricated power modules, are used in data centers, the power grid, and energy-intensive industrial facilities. It went public in February 2026.
Is FPS a good stock to buy right now?
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That depends on your goals, time horizon, and risk tolerance, and this is not investment advice. The bull case is explosive revenue growth, a near-$2 billion backlog, and direct exposure to AI data-center power demand. The bear case is an extremely high valuation, heavy reliance on the data-center capital cycle, and its status as a niche player versus much larger rivals. Weigh both against your own portfolio.
What does Forgent Power Solutions make?
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It makes engineered-to-order electrical distribution equipment in four families: transformers (padmount, substation, PDU, and VPI), switchgear (low and medium voltage, plus paralleling), automatic transfer switches, and prefabricated solutions such as eHouses and power skids. It also provides testing, modernization, commissioning, and aftermarket retrofit services. About 91% of fiscal 2025 revenue came from custom, engineered work.
When did Forgent Power Solutions go public?
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Forgent completed its IPO on the NYSE in February 2026 at $27.00 per share, raising roughly $491.8 million in primary proceeds. Combined with a follow-on offering, it brought in about $800.4 million of net proceeds during the quarter. Its private-equity backer, Neos Partners LP, has also sold shares in subsequent secondary offerings.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell FPS; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.