Forgent Power Solutions (NYSE:FPS) experienced a significant rally on Wednesday, gaining 11.10% to close at $34.84 per share, extending gains from the previous trading day. The advance followed the company’s announcement of a return to profitability in the fourth quarter of fiscal year 2026, alongside substantially improved financial performance across multiple metrics.
The company reported net income of $66.09 million for the fourth quarter, a marked reversal from a net loss of $4.76 million in the corresponding period of the prior year. Revenue climbed substantially to $461.67 million from $237.6 million in the year-ago quarter, representing 94% growth driven primarily by robust demand for electrical distribution equipment. Chief Executive Officer Gary Niederpruem highlighted the strength of the business, noting that the company secured more than $1.5 billion in orders during the fourth quarter alone—an amount exceeding the company’s total revenue for the entire fiscal year.
For the full fiscal year 2026, Forgent reported net income of $106 million, a 508% increase from $17.4 million in fiscal year 2025. Full-year revenues crossed the $1 billion threshold at $1.42 billion, reflecting 89% growth from $753.19 million previously. The Powertrain Solutions division proved particularly strong, with revenue growth of 259% and accounting for nearly one-third of fourth-quarter revenue.
Looking ahead, the company provided guidance for fiscal year 2027 of between $2.4 billion and $2.6 billion in revenues, implying growth of 69% to 83% year-over-year. Adjusted EBITDA is projected between $575 million and $625 million. To support expansion, Forgent announced a $35 million investment to expand its Powertrain Solutions manufacturing facility in Tijuana, Mexico, expected to become operational in the fourth quarter of fiscal year 2027 and increase revenue capacity by approximately $800 million.
Following the results, TD Cowen upgraded its price target on the stock to $76 from $73, indicating potential upside of 118% from the latest closing price, while maintaining a buy rating. The investment firm cited robust order momentum and backlog growth supported by accelerating US data center demand.
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