The Business
Forgent Power Solutions (NYSE: FPS), out of Dayton, Minnesota, designs and manufactures electrical distribution equipment — switchgear, power distribution, the gear that moves electricity around a building — with data centers as the marquee end market. In plain terms: when a hyperscaler builds an AI data center, someone has to distribute megawatts of power inside it. Forgent makes that hardware. Baird, initiating coverage, called it a company "built for the AI infrastructure buildout." It's sponsor-backed by Neos Partners, and it came public in February 2026 at $27, raising roughly $1.5–1.7B.
So this is the same secular wave I've written about from other angles — MYRG on the electrification/contractor side, SMCI on the server side. FPS is the power-distribution slice. The demand story is not in question.
Where the Price Is
As of 10:00 AM HST on Aug 13, 2026: $37.56, −$0.71 (−1.86%), on ~5.4M shares. The 52-week range is $25.95–$66.00, so the stock rocketed from its $27 IPO to $66, then gave back nearly half. It sits ~20% below its 50-day moving average ($47.04) — a clear downtrend. There is no 200-day yet; the company has only been public since February, so that longer-term line doesn't exist. RSI(14) is 44.5 — neutral, notably not oversold despite the drawdown, which tells you the selling has been orderly and supply-driven rather than a panic flush.
What the Numbers Say
Forgent runs a June-30 fiscal year, so the quarter labels are easy to misread — watch the period-end dates. The trajectory is loud regardless:
Fiscal Q2 2026 (quarter ended Dec 31, 2025): revenue $296M, +69% YoY, bookings $762M, +268% YoY, backlog $1.5B, +100% YoY, adjusted EBITDA $60M, adjusted net income $36M. By late July, backlog had grown to $1.98B — roughly 1.4x a full year of revenue already in hand. On the back of that, management raised full-year FY2026 guidance to revenue of $1.35–1.39B (~82% growth at the midpoint), adjusted EBITDA of $310–320M, and adjusted net income of $197–207M — call it ~$0.60 in adjusted EPS.
Now the other side of the ledger, because it matters. GAAP net margin is razor-thin — about 1.4% — and trailing free cash flow is negative (~−$98M). This is a company buying its growth: pouring cash into working capital and inventory to fill an exploding order book, and funding it with equity. It's sitting on ~$800M net cash because it raised over $1.3B selling stock. Hold that thought.
Why It's Moving
Here's the crux. FPS didn't halve because the business stumbled — it halved because of supply. Since the IPO, there's been a near-continuous parade of secondary offerings, largely the sponsor (Neos) and insiders selling down: a March follow-on around $29.50, then May/June/July deals priced at $47, $47, and $49. Every time the stock rallied, another block of shares hit the market. That is textbook post-IPO, sponsor-exit overhang — the float keeps growing, and price gets capped by the next offering.
So you have a fundamentally strong company whose chart looks broken, because two different clocks are running: the operating business is compounding, and the share-supply spigot is open. The stock has been the release valve between them.
The Thesis
Bull case. This is arguably the purest small/mid-cap way to own AI data-center power distribution. Backlog of $1.98B, bookings up 268%, guidance raised twice, and a Wall Street desk that is nearly unanimous — consensus is Strong Buy / Overweight with an average price target clustered around $53–59 (range $40 low to $73 high at TD Cowen), implying ~40–60% upside. If the secondary wave is finally done, the supply relief alone could let the stock re-rate back toward the fundamentals.
Bear case. Valuation is demanding — roughly 6–7x sales, ~26x EBITDA, and ~60x adjusted earnings — for a business with 1.4% GAAP margins and negative free cash flow. Growth is real but bought, and the same sponsor that IPO'd the company has been the one selling. Until that supply is confirmed exhausted, rallies keep meeting stock.
What changes my mind. Three things, in order: (1) the offerings stop — a clean stretch with no new secondary is the single biggest unlock; (2) free cash flow inflects positive, proving the growth funds itself; (3) the next print (fiscal Q4, expected ~Sep 2, 2026) holds or raises guidance again. A decisive reclaim of the 50-day would be the tape confirming the overhang has cleared.
Trade Plan
Setup. Post-IPO reset on a secular-growth name with a sponsor/dilution overhang. It's below the 50-day in a downtrend — this is a "wait for proof the selling is done" trade, not a momentum chase. Don't catch the knife; make it show you a floor or a reclaim.
Entry triggers (pick the one that fires):
- 50-day reclaim — a daily close back above ~$47 on above-average volume. The cleanest signal that the downtrend and the supply cap are broken (but ~25% above here).
- Reversal at support — a reversal candle in the $30–34 zone (round-number $30, near the March secondary at $29.50 and above the $27 IPO price), confirmed by the next day holding.
- RSI out of oversold — not there yet (44.5). If it flushes toward $30, watch for RSI <35 curling back above ~40.
- Higher-low structure — a higher low printed above ~$34 after the Sep 2 earnings = trend repair.
Staged entry. Starter at the support zone or on the 50-day reclaim; add on confirmation. Don't go all-in on one print in a name that can gap on an offering headline.
Stop / invalidation. A decisive daily close below ~$30 on volume says the overhang is still winning — step aside. Below that, the next references are the $27 IPO price and the $25.95 52-week low.
Targets / trim. Staged: $47 (50-day) → $53 (average analyst PT) → $59–60 (the Street's upper cluster), with $73 (TD Cowen high) as the stretch if execution keeps beating.
Hold horizon. Weeks to quarters — this is a thesis trade that needs the dilution to end and FCF to turn, not a two-day pop.
Position size. Recent IPO, high beta, live secondary-offering risk, and earnings ~Sep 2 — this is a speculative name. Size accordingly, and respect that an offering headline can gap it overnight.
Bottom Line
Forgent is a good business riding the biggest capex theme in the market, trading like a broken one because it can't get out from under its own share supply. That's an opportunity and a warning: the fundamentals argue for much higher, but the chart won't confirm until the selling stops. So I'd let it prove itself — base at $30–34 or reclaim $47 — before stepping in, rather than assuming the bottom is in while the offering window is still open. Thesis before trade: the setup is attractive, the timing isn't confirmed yet.
Price and technical data pulled live from Yahoo Finance at 10:00 AM HST on August 13, 2026. Fundamentals from company releases via StockTitan, Benzinga, Simply Wall St, and TheFly; analyst targets from Benzinga/Zacks/WallStreetZen. Fiscal year ends June 30. Levels are point-in-time and will move.