FPS Q4 FY2026 Research Packet

HOLDConviction 3 / 5Uncertainty: High

Fair value (base)$29.00range $13.32–$46.20

Price, Sep15 early trade, 07:25 CDT; USD$30.67-5% to base

Probability-weighted$29.38-4% expected

HOLD, with $29 base fair value. Forgent is turning power-equipment demand into real revenue and margin growth. Customer advances fund a meaningful share of the cash ramp, while consolidated earnings must be valued across all economic owners. Three models span $24.99–$32.00, below the $30.67 early-trading quote at their midpoint. The $3.0B backlog supports growth, but it does not settle delivery timing, recurring cash conversion or the multiple shareholders should pay.

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Layer 1 · fast

The 60-second read

Q4 revenue$461.7M94.3% YoY; 21.9% sequential

Q4 adjusted EBITDA$112.7M24.4% margin; company non-GAAP measure

Q4 GAAP / adjusted EPS$0.21 / $0.25FMP actual EPS matches adjusted, not GAAP

Backlog$3.0BRecord orders; not booked revenue or cash

Q4 operating cash$73.9MCustomer-advance inflow was $130.3M

FY2026 FCF−$6.8MComputed: operating cash less all PPE purchases

FY2027 revenue guide$2.4–2.6BCompany guide; 76.0% growth at midpoint

Economic diluted units304.756MClass A + paired Opco rights + RSU allowance

Five things to know

The commercial step-up is real. Q4 sales rose 94.3% and bookings reached $1.503B. Powertrain Solutions revenue grew 259.3% for the full year, extending Forgent’s role beyond individual components.
The cash engine depends on advances. Q4 operating cash was $73.901M, alongside a $130.345M increase in deferred revenue cash flow. That funding supports delivery; it should not be mistaken for cash already earned on completed orders.
The share count changes the valuation. The September8 cover has 274.527M Class A shares and 29.902M Class B shares paired with Opco interests. Consolidated operating value is divided across those economic rights, not only public Class A shares.
The tax agreement needs a matched calculation. The $338.925M gross tax receivable obligation transfers 85% of specified tax benefits. Our models charge normalized tax and exclude both special tax shields and their matched payments; acceleration remains a separate downside risk.
The guide raised the bar above old consensus. FY2027 revenue midpoint is 22.5% above the fetched $2.04B consensus. Three valuation routes average $29.23 before rounding, versus a $30.67 verified early trade. Older bullish analyst targets are not post-release endorsements.

Layer 1 · the call

Three scenarios, one probability-weighted number

Analyst scenarios in USD per economic share; probabilities are judgment, not company forecasts.

Scenario values and reference price · Values are computed using the bridge below.

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Measure	Value
Bear	13.32
Base	29.0
Bull	46.2
Weighted	29.38
Early trade	30.67

Scenario	Probability	12-month value	vs $30.67	What has to happen	The arithmetic
Bear	25%	$13.32	−57%	FY2027 sales reach only $2.0B, margins soften, and investors pay a lower multiple for expansion risk.	($380M EBITDA after recurring compensation × 12 − $501.023M net debt) ÷ 304.755889M economic diluted shares = $13.32.
Base	50%	$29.00	−5%	Orders convert near the midpoint of guidance; cash conversion improves, but valuation retains reinvestment and ownership charges.	Equal-weight values of $30.710, $32.003 and $24.987 average $29.233, rounded to $29.
Bull	25%	$46.20	+51%	Revenue reaches $2.9B, adjusted EBITDA margin reaches 26%, and strong conversion supports a 20× operating multiple.	(($2,900M × 26% − $25M compensation) × 20 − $501.023M) ÷ 304.755889M = $46.20.
25% × $13.32 + 50% × $29.00 + 25% × $46.20 = $29.38. The base value and probability-weighted value are different measures. High uncertainty supports a 25% margin-of-safety requirement, approximately $21.75, before a valuation-led BUY.

Layer 1 · falsifiable

Signposts: what would change our mind

Signpost	Now (Q4 FY2026)	Green if	Red if	Next check
Revenue conversion	Q4 $461.7M; FY2027 guide $2.4–2.6B	Quarterly sales rise toward annual guide	Annual guide below $2.4B	Q1 FY2027 results; date unannounced, review by Dec31 2026
Recurring cash funding	Q4 OCF $73.9M; advances +$130.3M	Positive OCF with advances growing slower than sales	OCF negative as advances flatten	Q1 FY2027 results; review Dec31 2026
Operating margin	Q4 adjusted EBITDA margin24.4%	At least22% as new capacity ramps	Below20% without temporary explanation	Q1 FY2027 results; review Dec31 2026
Capital discipline	FY2027 capex guide ~$87M	Annual spend at or below$100M, milestones met	Above$120M without contracted returns	Each FY2027 quarter; final review Sep30 2027
Backlog quality	June30 backlog ~$3.0B	Backlog converts with book-to-bill above1	Book-to-bill below1 for two quarters	Q2 FY2027 results; review Mar31 2027
Owner economics	TRA $338.9M; 304.429M basic rights	Stable economic units; payments matched to benefits	Units rise >5% without proportional value; TRA acceleration	Next filing; review Dec31 2026

These are new, forward-looking tests. No prior Charged Alpha FPS quarter is on record, so there is no fabricated historical score. Dates marked “review by” are our checkpoints, not issuer-announced earnings dates.

Price and expectations

The reference trade is $30.6661, rounded to $30.67, at 07:25:17 CDT on September15. It is 7.07% above the $28.64 September14 regular close. This is an early-trading observation, not a completed print-day return or a promise that the move lasts. The regular-close quote alone would understate the price available in the separately fetched extended-hours feed. Market prices are time-sensitive; all valuation comparisons retain this dated reference rather than silently refreshing only the denominator.

Listed price history versus our base value · FMP daily closes since the February2026 listing. A 15-month request returned only actual listed history; the intraday reference is separate.

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Observation	USD
Sep14 regular close	28.64
Sep15 early trade	30.6661
Base value	29

Price$30.67 early

Prior close$28.64

Early move+7.07%

52-week high$66.00

52-week low$25.95

Basic economic rights304.429M

Diluted model units304.756M

Operating net debt$501.023M

Gross TRA$338.925M

Restricted cash$24.236M

FY27 sales midpoint$2.5B

FY27 EBITDA midpoint$600M

FY27 adj EPS midpoint$1.33

Base value$29.00

Weighted value$29.38

UncertaintyHigh

The valuation question is not whether electrical demand is growing; the release already answers that. It is how much durable owner cash can emerge from a manufacturing system expanding this quickly. A 52-week high is not an intrinsic-value anchor. The stock can remain far below its peak while still requiring a strong operating outcome. Conversely, an unusually strong guide can make a seemingly expensive trailing multiple less informative. We therefore show forward assumptions, the ownership bridge and a discounted cash-flow check together, rather than treating the share-price decline as evidence of cheapness.

Reported print	Regular-close reaction availability
Mar16 FY2026 Q2	Post-IPO daily price observations saved; compare adjusted share basis carefully
May14 FY2026 Q3	Daily series saved; older business/earnings basis differs
Sep15 FY2026 Q4	Current regular session incomplete; early trade +7.07%
Earlier six requested quarters	No comparable publicly traded FPS history before February2026
No invented nine-quarter return series. Historical returns are context, not a causal forecast.

The earnings print

Forgent reported $461.672M of quarterly sales against $237.613M a year earlier. The year-over-year growth rate is 94.30%; sequential growth from March is 21.91%. The increase is accompanied by a genuine improvement in operating earnings, not merely a tax benefit or financing mark. Gross profit reached $166.695M, operating income $91.899M and consolidated net income $66.094M. The distinction between consolidated profit and the $53.298M attributable to the public holding company remains essential when interpreting the EPS line.

Eight verified quarters of revenue · Primary filing tables; June2024 discrete quarter is unavailable, not zero.

Revenue

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Period	Revenue
Q1 '25	154.013
Q2 '25	175.338
Q3 '25	186.224
Q4 '25	237.613
Q1 '26	283.274
Q2 '26	296.404
Q3 '26	378.709
Q4 '26	461.672

USD millions unless EPS	Q4 FY26	Q4 FY25	Q3 FY26
Revenue	461.67	237.61	378.71
Gross profit	166.69	79.70	131.20
SG&A	62.64	58.36	78.52
Operating income	91.90	8.29	39.34
Interest expense, signed	−11.42	−12.95	−10.84
Pretax income	80.52	−3.37	28.88
Income tax, signed	−14.43	−1.39	−4.40
Net income	66.09	−4.76	24.48
Minority allocation	12.80	−2.20	6.19
Attributable income	53.30	−2.56	18.29

FMP reports $461.672M revenue actual against $429.936M estimated and $0.25 EPS actual against $0.2397 estimated. Revenue therefore agrees exactly with the release, while the EPS field matches the company’s adjusted measure. GAAP quarterly diluted EPS is $0.21. The annual $0.30 GAAP figure should not be treated as a comparable full fiscal-year per-share result: the audited annual statement measures the listed Class A EPS period from February6 through June30 following the IPO. The release’s table uses February5 for its stub label, a source inconsistency preserved in our research. It does not justify backfilling pre-IPO EPS.

Operating progress, before ownership allocation · Company adjusted EBITDA is not GAAP operating income. Some earlier add-back bases changed with the IPO.

Operating incomeAdjusted EBITDA

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Period	Operating income	Adjusted EBITDA
Q1 '25	22.601	43.22
Q2 '25	18.945	39.874
Q3 '25	22.4	43.254
Q4 '25	8.291	42.825
Q1 '26	31.163	65.1
Q2 '26	20.09	60.383
Q3 '26	39.336	84.682
Q4 '26	91.899	112.736

The new FY2027 guide is more useful than extrapolating one quarter. Management expects sales of $2.4–2.6B, adjusted EBITDA of $575–625M, and adjusted EPS of $1.26–1.40. Midpoints imply 76.05%, 85.81% and 95.59% growth against the corresponding reported annual metrics. Those are company forecasts, not earned results. Management expects sales and adjusted EBITDA to rise consecutively during the year, with initial investments weighing on the first quarter. The call is still pending at this research cutoff, so no analyst Q&A or management explanation from that call is invented.

Products, orders and capacity

Forgent reports one operating and reportable segment. Product categories are revenue disclosures, not independently reported profit centres. Custom Products generated $990.484M during FY2026; Powertrain Solutions $357.409M; Standard Products $42.452M; Services $29.714M. Assigning separate product EBITDA margins would invent information the filing does not disclose. The useful mix signal is Powertrain: it integrates equipment into larger systems and raises the amount Forgent can sell on one project. That also concentrates execution obligations and makes a handful of large project schedules more important.

Offering mix: annual revenue · USD millions; revenue categories, not separate reportable segments.

CustomPowertrainStandardServices

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Period	Custom	Powertrain	Standard	Services
FY25	590.646	99.479	34.624	28.439
FY26	990.484	357.409	42.452	29.714

Powertrain revenue by quarter · Quarter4 category revenue computed as annual less nine-month totals; no product-profit allocation.

Powertrain

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Period	Powertrain
Q1 '25	5.832
Q2 '25	14.063
Q3 '25	28.427
Q4 '25	51.157
Q1 '26	65.411
Q2 '26	46.373
Q3 '26	98.924
Q4 '26	146.702

Commercial scale versus the production plan · USD millions. Company bookings/backlog are orders, guide is a forecast, and capacity is a long-run potential. These are not interchangeable.

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Measure	Value
Q4 bookings	1503
June backlog	3000
FY27 sales midpoint	2500
Planned capacity	5800

Quarterly bookings reached $1.503B, a 3.3× book-to-bill ratio. Backlog of approximately $3.0B is around 120% of the FY2027 revenue midpoint. That comparison supports visibility but does not mean the coming year is fully locked in: conversion dates, product mix, customer changes and execution can move revenue between periods. The company expressly warns that backlog may not become revenue or profits at the amount or time expected. We credit the demand signal and still require repeated delivery and collection evidence.The newly announced $35M Tijuana Powertrain expansion is incremental to the earlier capacity programme. It is expected online in fiscal2027’s fourth quarter and would lift total revenue capacity to approximately $5.8B, including around $800M of incremental potential. Capacity is not a sales forecast and a low ratio of sales to theoretical capacity is not automatically a defect: facilities, labour, suppliers and product qualifications ramp at different speeds. The risk is paying today for capacity that takes longer to fill, or expanding low-return orders to meet headline throughput. Management’s commercial claim earns more credibility if margins, receivable days and cash conversion improve together.The annual filing identifies one customer at approximately 11% of FY2026 revenue and 15% of year-end accounts receivable. No customer exceeded 10% of either measure in FY2025. This is a concrete collection concentration, not a claim that every large backlog project belongs to the same customer. Track payment and delivery performance alongside total order growth.

Profit and economic ownership

Q4 earnings: operation to public-company share · USD millions, source release. Positive starting total followed by signed deductions/additions.

The quarter’s $66.094M consolidated net income includes $12.796M allocated to non-controlling interests, or 19.36%. That percentage is historical, not a perpetual ownership discount. Exchanges of Opco units change the mix of public Class A ownership and the non-controlling interests over time. The September8 cover discloses 274,527,094 Class A shares and 29,901,795 Class B shares. Class B shares have votes but no right to public-company dividends or liquidation distributions; their holders own paired Opco interests. Our full-conversion model includes those paired economic rights, not a false claim that Class B itself earns the same dividend as Class A.

Current economic ownership bridge · Millions of units. Model adds the Q4 0.327M diluted RSU effect as an allowance; it is not a forecast of future issuance.

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Measure	Value
Class A	274.527
Paired Opco rights	29.902
Total basic rights	304.429
Diluted model units	304.756

The sum is 304.428889M basic economic units. Adding the quarter’s 0.327M diluted restricted-share effect gives the 304.755889M denominator used across forward consolidated valuation routes. This keeps numerator and denominator aligned. Using only the Class A share count with 100% of consolidated EBITDA would overstate per-share value. Conversely, subtracting the minority book balance and also including all paired Opco units could penalize the same outside economic interest twice. Changes to actual ownership, settlement choices or equity compensation should be reflected prospectively; the current allowance is deliberately transparent.

Annual profit before and after minority allocation · Pre-IPO ownership and the post-IPO holding-company structure differ. Annual GAAP EPS is not a comparable full-year bridge.

ConsolidatedAttributable

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Period	Consolidated	Attributable
FY25	17.446	15.196
FY26	106.035	81.845

The public company’s capital raising also needs context. FY2026 cash flows show $491.833M of net IPO proceeds and $1,033.131M of net follow-on proceeds, matched by purchases of existing shareholders’ Opco interests. These entries change who owns the cash-generating business; they are not $1.525B of incremental cash retained for plant construction. That distinction explains why headline offering size should not be added to the balance sheet when valuing the manufacturing ramp. Neos still controlled approximately 37.2% of combined voting power at September8, with nomination and consent rights described in the annual report.

Earnings quality and cash timing

▲ WatchStock compensation

0.71% of annual sales

$10.036M annual SBC; models reserve $20M forward rather than ignoring dilution.

▲ WatchAdjusted gap

$0.25 vs $0.21

Adjusted vs GAAP Q4 EPS; structures and amortization matter.

▲ WatchBelow the line

$11.38M Q4 expense

Net interest/other lowers operating income; not a free add-back.

▲ WatchMinority allocation

19.36% Q4 net income

Historical allocation; model uses current full economic unit count.

▲ WatchCash conversion

102.9% annual OCF / NI

Looks healthy, but advances added $152.964M and FCF was negative.

▲ WatchReceivable days

65.2 days

End balance / quarterly sales ×91.25; not reported DSO.

▲ WatchInventory days

77.3 days

End inventory / quarterly cost of revenue ×91.25; mix-sensitive.

▲ WatchEffective tax

17.9% Q4

Annual16.8%; model uses24% normalized tax, not the low reported rate.

✔ CleanGuidance delivery

Above May high end

Current release says sales, EBITDA and adjusted NI exceeded guidance.

Reported annual cash conversion passes a simple net-income comparison: $109.081M of operating cash against $106.035M of net income. It fails a more demanding question about cash remaining after the complete expansion programme. All PPE purchases were $115.905M, leaving negative $6.824M of free cash flow under our definition. Free cash flow here is operating cash less all PPE purchases, after operating interest and taxes, before financing distributions and acquisitions. We do not replace total investment with a smaller maintenance-only number and call the difference freely distributable.

Operating cash, investment and free cash · FY24 successor period is September9 2023–June30 2024, not a full fiscal year. Capex shown positive for comparison.

OCFPPE purchasesFCF

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Period	OCF	PPE purchases	FCF
FY24 stub	−4.63	2.907	−7.537
FY25	45.022	84.115	−39.093
FY26	109.081	115.905	−6.824

Quarterly cash and customer funding · Quarter cash flows computed from year-to-date statements. Advance inflow is the cash-flow change in deferred revenue.

Operating cashAdvance inflow

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Period	Operating cash	Advance inflow
Q1 '25	17.012	1.584
Q2 '25	42.701	34.724
Q3 '25	−7.482	−1.485
Q4 '25	−7.209	−14.076
Q1 '26	5.935	−5.898
Q2 '26	0.072	49.904
Q3 '26	29.173	−21.387
Q4 '26	73.901	130.345

The fourth quarter is especially instructive. Year-to-date subtraction gives $73.901M operating cash and $31.301M PPE purchases, leaving $42.600M FCF. The cash-flow increase in deferred revenue was $130.345M in that quarter. Removing that single positive funding component produces negative $56.444M of operating cash as a sensitivity. This is not a replacement GAAP measure or a forecast that customers stop paying advances. It isolates the dependence on customer-funded growth while receivables, inventory and supplier deposits consume cash. A healthy model can be funded this way; a change in order cadence can also reverse the benefit.

Working-capital run-rate days · Computed end balances divided by quarterly sales or cost of revenue ×91.25; not average-balance DSO/DIO.

ReceivablesInventory

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Period	Receivables	Inventory
2025-06	61.433	67.942
2025-09	60.977	70.862
2025-12	77.277	75.232
2026-03	66.163	66.174
2026-06	65.151	77.28

The historical data deserves caution. FMP’s standardized quarterly income statements classify some depreciation and operating costs differently from the primary statements and attach incorrect fiscal-year labels to several dates. All financial tables here therefore come from the actual filings, with current-release comparisons preferred where available. A $0.002M difference exists between Q4 SBC obtained by annual-minus-nine-month cash-flow subtraction and the release’s adjusted EBITDA reconciliation; each is retained on its own basis. We do not manufacture accounting precision by forcing those source rows to agree. Beneish or Altman model outputs are omitted because acquisition history, predecessor periods and the new holding-company structure undermine simple like-for-like inputs.

Balance sheet and the tax agreement

Gross obligations and available cash · TRA is a contingent tax-benefit sharing obligation, distinct from bank debt. Restricted cash is excluded from net-debt offset.

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Measure	Value
Term-loan face debt	598.5
Unrestricted cash	97.477
Operating net debt	501.023
Gross TRA	338.925
Restricted cash	24.236

June30 balance sheet	USD millions	Interpretation
Cash and equivalents	97.477	Usable cash offset
Cash plus restricted cash	121.713	Cash-flow statement total
Gross term loan	598.5	Face amount, before financing costs
Debt carrying value	582.175	Includes $16.325M discount/financing costs
TRA liability	338.925	Gross future benefit-sharing obligation
Net deferred-tax asset	280.971	Not cash; includes components beyond one TRA calculation
Operating lease liabilities	121.596	Rent remains in operating margins
Total book equity	671.401	Includes NCI book equity $107.084M

Net operating debt is $501.023M using face debt less unrestricted cash. Debt carrying value is lower because unamortized discount and financing costs are deducted in the accounting balance. Those deductions do not reduce the contractual face repayment. The loan’s effective interest rate was approximately 6.39% at June30; floating-rate exposure and refinancing conditions still matter. Lease liabilities are shown separately. The operating models retain rent in expense, so they do not additionally capitalize leases and subtract the same obligation without an EBITDAR adjustment.The Up-C structure has a tax receivable agreement, or TRA. It generally pays continuing owners 85% of specified realized or deemed-realized tax benefits, leaving the public corporation 15%. The $338.925M recognized liability is therefore a real obligation, but subtracting it in full from a valuation that already charges full normalized taxes and gives no credit for the corresponding tax shields can double-charge the same economics. Our base operating, earnings and discounted-cash-flow models use 24% normalized tax. They exclude both the special exchange tax shields and the matched TRA payments, and assign zero value to the retained 15% benefit. That is a conservative simplification, not a claim the agreement costs nothing.The simplification has limits. Payment timing, interest, deemed realization, early termination and acceleration can separate the obligation from actual tax savings. The annual filing expressly identifies this risk. A full gross-liability cash stress is about $1.11 per model share before any matching tax benefit, financing response or timing discount. It is a stress, not an additional automatic subtraction in our base case. Future unit exchanges can also create additional tax attributes and liabilities. We will revisit both sides together when those events are reported, rather than adding new liabilities while ignoring new shields or counting the entire deferred-tax asset as bank cash.Customer funding also has a balance-sheet counterpart: deferred revenue is $263.859M, compared with $110.895M a year earlier. These balances represent work and delivery obligations, not excess cash that can simply be distributed. Supplier deposits and prepaid assets rose alongside the production ramp. The best evidence of balance-sheet strength would be cash growth after fulfilling those obligations, with debt and economic units stable. Forgent has roughly 3,000 full-time and 450 temporary employees; the labour-intensive nature of execution is another reason to distinguish theoretical factory capacity from earnings available to shareholders.The term loan matures December 19, 2032, and the $250M revolving facility matures December 19, 2030. The revolver had no borrowings at June 30. The principal schedule is $6M in each fiscal year 2027–2031 and $568.5M thereafter, totaling $598.5M. Undrawn commitments are liquidity capacity, not cash or a reduction of enterprise debt. Borrowings are secured by substantially all loan-party assets, subject to customary exceptions. The springing covenant is tested when revolving borrowings exceed 40% of commitments, excluding undrawn letters of credit, and caps defined first-lien net debt / defined adjusted EBITDA at 7.50×. Those agreement definitions are not interchangeable with our valuation EBITDA.The holding-company risk disclosure adds a distribution constraint: while the TRA remains outstanding and effective, distributions received from Opco may be used to meet TRA, tax and legal-compliance obligations, with no other use permitted under that disclosure. This restricts near-term cash access for public dividends even if the operating business generates cash. Our FCFF valuation estimates operating economic value; it does not promise an immediately distributable dividend stream. The explicit no-cash-dividend policy and matched tax/TRA treatment remain in the base model.

Three valuation routes

At the $30.6661 reference trade, basic economic equity value is $9.336B. The diluted model denominator produces $9.346B of equity value; adding $501.023M net operating debt gives $9.847B of enterprise value. This is 16.41× the $600M FY2027 adjusted EBITDA midpoint. The fetched FMP capitalization of $7.446B uses a narrower/stale share basis and earlier quote, so it is not used with 100% of consolidated forward operating profit.

Compensation-charged operating multiple

Company EBITDA midpoint $600M less analyst recurring-compensation reserve $20M = $580M. At 17×, enterprise value is $9,860M. Subtract $501.023M face net debt once, then divide by304.755889M economic diluted units: $30.71. The 17× multiple is our judgment, not a claimed peer average. It assumes strong growth while charging for recurring compensation and keeping rent in expenses.

Normalized forward earnings

FY2027 adjusted EPS midpoint is $1.33. Deduct $20M of assumed recurring compensation after24% tax across304.755889M units, or $0.0499 per share. Normalized EPS is $1.2801. At25×, value is $32.00. This is an equity earnings route: interest is already charged, so net debt is not subtracted again. Other recurring costs must not migrate into permanent “one-time” exclusions.

Ten-year unlevered cash-flow model

Explicit sales grow from $2.5B inFY2027 to$5.703B inFY2036. EBIT margins reach22%; cash tax24%, D&A3% of sales, capex$87M inFY2027 then3.5% of sales, incremental working capital14% of incremental sales. Discount at10.5%, terminal growth3%. Present operating value less$501.023M net debt divided by304.755889M units gives $24.99. This is an analyst model, with reinvestment fully charged.

Three routes, same economic denominator · USD per economic share. Equal-weight mean $29.23, rounded down to $29; no averaging of incompatible currency or ownership bases.

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Measure	Value
Operating multiple	30.71
Earnings multiple	32.003
Cash-flow DCF	24.987
Rounded base	29

Operating-value sensitivity · USD per share. *EBITDA after compensation × multiple less $501.023M net debt, divided by 304.755889M units. Analyst assumptions.

Modeled cash-flow conversion · Analyst cash flow after normalized tax, reinvestment and working capital; not management cash guidance.

FCFF

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Period	FCFF
2027	216.808
2028	395.26
2029	501.16
2030	602.02
2031	673.234

Fiscal year	Revenue $M	EBIT margin	Capex $M	ΔNWC $M	FCFF $M
2027	2500	20.0%	87.00	151.19	216.81
2028	3100	21.0%	108.50	84.00	395.26
2029	3650	21.5%	127.75	77.00	501.16
2030	4100	22.0%	143.50	63.00	602.02
2031	4470	22.0%	156.45	51.80	673.23
2032	4783	22.0%	167.41	43.82	731.98
2033	5070	22.0%	177.45	40.18	782.17
2034	5324	22.0%	186.34	35.56	827.99
2035	5537	22.0%	193.80	29.82	868.28
2036	5703	22.0%	199.61	23.24	901.79

The cash-flow model exposes the price’s demand on execution. Holding the first three modeled margins and other inputs constant, the reference price requires a mature EBIT margin of approximately 26.9%, versus22% in our base path. This is a reverse-DCF sensitivity, not a forecast and not a claim that margin is the only way to close the value gap. Faster sales, lower reinvestment, a lower discount rate or a richer terminal valuation can also do it. The terminal component accounts for 56.2% of discounted operating value; confidence should therefore be lower than the apparent precision of the spreadsheet.The three routes average $29.23, rounded to a $29 base. The $13.32–$46.20 scenario range is wide because capacity execution, customer concentration, cash timing and terminal multiples are uncertain. A HOLD means the price is close enough to modeled value to respect the operating progress, but lacks the discount required for a valuation-led purchase. Our High uncertainty rating calls for a25% margin of safety, roughly$21.75, absent better evidence. This threshold is not a predicted trading target. A five-percent increase in economic units would lower per-share value by roughly five percent before proceeds; compensation and acquisitions must earn their dilution.

Wall Street context

The fetched consensus predates assimilation of this release. FY2027 revenue average is $2.04B, versus the new company midpoint of $2.5B, a22.55% gap. The average EBITDA estimate is $484.339M and EPS average $1.09. These figures are useful to establish what changed, but their earnings and share bases are not guaranteed to be identical to the company’s current pro forma adjusted definitions. We do not infer an operating margin by dividing vendor expense lines that fail the primary filing’s classification. Revenue offers the cleanest comparison.

New guide versus fetched old expectations · USD millions; different metrics shown explicitly. Consensus snapshot is not a confirmed post-release refresh.

Old consensusCompany midpoint

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Period	Old consensus	Company midpoint
Revenue FY27	2040	2500
EBITDA FY27	484.339	600

Ratings on record · FMP grades-consensus snapshot; six recorded ratings, not a survey of fresh post-release reactions.

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Measure	Value
Buy	5
Hold	1
Sell	0

Firm	Date	Recorded target	Freshness
Robert W. Baird	2026-07-15	$55.00	Pre-release / stale for this guide
Wolfe Research	2026-07-09	$60.00	Pre-release / stale for this guide
Jefferies	2026-05-29	$56.00	Pre-release / stale for this guide
Morgan Stanley	2026-05-17	$51.00	Pre-release / stale for this guide
TD Securities	2026-05-15	$63.00	Pre-release / stale for this guide
Oppenheimer	2026-05-15	$60.00	Pre-release / stale for this guide

Examples include Baird at$55 onJuly15, Wolfe at$60 onJuly9, Jefferies at$56 onMay29 and Morgan Stanley at$51 onMay17. Those are dated third-party marks distributed through FMP, not newly verified reactions to the September report. The ratings stack has five Buys and one Hold. Our HOLD and$29 base are more cautious because we explicitly value cash reinvestment, all economic units and a broad uncertainty band. The difference is a model disagreement rather than an assertion that the Street missed the company. A fresh analyst target would still need its earnings basis and assumptions examined.Later-year consensus rows extend toFY2028 andFY2029, but the number of EPS analysts falls to two and one respectively in the fetched data. Sparse long-range observations are not a robust distribution. We show the near-term guide versus the old consensus and retain the raw longer path in the dataset. The next useful revision is whether analysts raise recurring cash-flow expectations alongside sales and adjusted earnings. Raising a target because a multiple expands is different from increasing value because more after-tax cash survives the production ramp.

Management and capital allocation

Management has earned credit for delivering above its May guidance and for growing bookings faster than sales. Gary Niederpruem argues that the company is gaining share as customers prioritize execution certainty and engineered solutions. That explanation is consistent with the size and breadth of the order step-up, but share gain is not independently quantified in the filings. We therefore treat it as management’s interpretation, and test the underlying evidence through conversion, margins and repeat orders rather than elevating it to an external market-share fact.

Decision	Evidence	Assessment
Delivery against guidance	Q4 sales/EBITDA/adjusted NI above May high end	Positive; retain old targets for future grading
Capacity expansion	$35M Tijuana addition; FY2027 capex ~$87M	Needs returns and schedule discipline
Compensation	$10.036M FY2026 SBC; future reserve in valuation	Charge recurring labour economics
Capital raising	$1.525B net IPO/follow-on proceeds matched to Opco purchases	Ownership liquidity, not retained plant cash
Control	Neos37.2% combined voting power atSep8	Influential sponsor; interests may differ
Tax sharing	85% of specified benefits to continuing owners	Value shields and obligations together

Five questions would most improve the model. How much of the backlog is scheduled forFY2027 versus later periods, and what cancellation or repricing rights apply? What share of the quarter’s advance inflow reflects repeatable terms rather than unusually large customer deposits? How much working capital is required at a$2.5B sales rate? What is the expected calendar of net cash tax savings and TRA payments, including contingent acceleration terms? Finally, what return hurdle governs the new capacity and any acquisition that uses public shares? These questions address cash and governance without pretending the pending conference call has already answered them.The annual report’s issuer and auditor are clearly identified: Forgent Power Solutions, Inc., audited by BDO USA, P.C., PCAOB243. It is a newly public company, with a short listed track record and an acquisition-built predecessor history. Boilerplate warnings about controls or going-concern consequences are not treated as a disclosed current adverse audit opinion. We also avoid importing a foreign-issuer VIE or ADS warning into a direct NYSE common-share listing. The relevant complexity is the operating partnership and sponsor rights actually described in the filing.

Risks and competing cases

Rank	Risk	Likelihood	Impact	Evidence to watch
1	Orders arrive faster than cash conversion	High	High	Advances, receivables, inventory and deferred revenue
2	Capacity ramp misses cost or timing targets	Medium	High	Margins, capex and on-time deliveries
3	Large-project/customer concentration	Medium	High	Powertrain mix and backlog conversion
4	Valuation compresses despite growth	Medium	High	Forward growth versus16.4× EBITDA EV
5	TRA timing or acceleration	Low–medium	High	Tax/TRA disclosures and cash payments
6	Sponsor sales or economic dilution	Medium	Medium	ClassA/Opco units and equity awards
7	Rates, tariffs and input availability	Medium	Medium	Interest expense, copper/steel sourcing and pass-through terms

The strongest bull case is that Forgent is selling scarce engineering and delivery capacity into a multiyear electrical build-out. Modular products expand wallet share, and customer advances reduce the cash required from shareholders. If higher volume improves factory utilization while advance terms remain healthy, earnings and cash can grow faster than installed assets. The new guide already exceeds the fetched old consensus, so simplistic trailing multiples can miss the speed of the operating reset. Under our bull assumptions, stronger sales and a20× operating multiple support$46.20 per economic share.The strongest bear case accepts the order book but questions how much value investors retain. Large orders can lengthen the cash cycle, require expensive execution resources and reverse advance funding when shipments catch up. A broad build-out can draw new competitors or stronger customer bargaining power. Sponsor rights, the tax agreement and unit exchanges complicate a valuation that looks easy if it multiplies EBITDA by a headline market cap. In our bear scenario, weaker sales and a12× multiple yield$13.32. Neither case requires alleging fabricated orders or assuming every project converts perfectly.We land between those cases. The earnings improvement is substantial and supported by the primary P&L. The cash-flow statement is also clear that funding timing contributes heavily. This combination supports a constructive view of the business and a cautious view of the entry price. The investor should monitor actual conversion rather than seeking certainty from a single ratio. A rising backlog paired with deteriorating cash collection is different from a rising backlog paired with shortening lead times and stable margins; the same headline can accompany very different shareholder outcomes.

Dated checkpoints

When	Event or check	Status
Sep15 2026,10:00CDT	Q4/FY2026 earnings call	Pending at research cutoff
ByDec31 2026	Review Q1 FY2027 conversion and margin	Analyst checkpoint; report date unannounced
Jan28 2027	Annual shareholders meeting	Issuer announced; virtual
ByMar31 2027	Review two-quarter book-to-bill and cash pattern	Analyst checkpoint
Q4 FY2027	Tijuana Powertrain capacity expected online	Company expectation, not guaranteed
BySep30 2027	GradeFY2027 revenue and capital-spending commitments	Analyst checkpoint

The immediate catalyst is clarification, not another invented set of results. The call can explain delivery schedules, new-facility start-up costs, advance terms and the tax-payment calendar. Those answers may alter the model’s confidence or cash assumptions even if the reported headline numbers remain unchanged. The next financial checkpoints should compare actual progress with the original thresholds above, preserving a record rather than quietly moving the goalposts. We would become more constructive if cash remains positive without accelerating advance dependence, operating margins hold through expansion and the economic denominator stays disciplined.A change in stock price alone is not a thesis update. A lower price can create a margin of safety without an operating improvement, while a higher value estimate should require better expected owner cash or lower justified risk. Conversely, a superficially cheap multiple after a guidance cut may not be cheaper economically. Our dates distinguish issuer events from internal review deadlines so readers do not mistake a planning calendar for a confirmed earnings schedule. No publication status or final platform links are claimed by this draft packet.

Sources, history and method

All financial amounts are U.S. dollars unless explicitly labelled shares, percentages or per-share values. The source table data retain their original thousand-dollar columns; displayed millions divide those values by1,000. Derived values are computed in the episode dataset and marked as calculations. Quarter1 is derived from half-year less Quarter2; Quarter4 product mix and cash flow are annual less nine-month totals. The current release supplies Quarter4 P&L directly. Difference calculations tolerate disclosed thousand-dollar rounding without silently replacing a source number.

Period	Sales $M	Operating $M	Pretax $M	Net $M	NCI $M	OCF $M	FCF $M
Q1 FY2025	154.01	22.60	8.55	7.34	1.06	17.01	8.90
Q2 FY2025	175.34	18.95	7.28	6.43	1.84	42.70	26.43
Q3 FY2025	186.22	22.40	10.34	8.44	1.56	−7.48	−26.19
Q4 FY2025	237.61	8.29	−3.37	−4.76	−2.20	−7.21	−48.24
Q1 FY2026	283.27	31.16	18.49	15.56	5.54	5.93	−23.95
Q2 FY2026	296.40	20.09	−0.49	−0.09	−0.34	0.07	−26.41
Q3 FY2026	378.71	39.34	28.88	24.48	6.19	29.17	0.94
Q4 FY2026	461.67	91.90	80.52	66.09	12.80	73.90	42.60
Requested ninth quarter, June2024: discrete quarter unavailable in saved primary sources. Eight actual quarters shown; no zero substitution.

Annual/source period	Sales $M	Net $M	OCF $M	PPE $M	SBC $M
FY2026	1,420.06	106.03	109.08	115.91	10.04
FY2025	753.19	17.45	45.02	84.11	1.78
FY2024 successor stub	181.31	−19.20	−4.63	2.91	0.65
FY2024 predecessor stub	64.48	8.46	4.73	1.76	0.00
FY2024 successor and predecessor periods have different scopes and overlap around formation/acquisitions. They are retained separately, not summed into a fabricated comparable full year.

Source	Link
Q4 / FY2026 release	Q4 / FY2026 release
FY2026 annual report	FY2026 annual report
Q3 / nine-month report	Q3 / nine-month report
Q2 / half-year report	Q2 / half-year report
IPO prospectus / prior history	IPO prospectus / prior history
Market prices, targets and consensus	Financial Modeling Prep
Issuer release timing	Actual issuer release

The three-year requirement is met as far as the issuer’s history permits: two full fiscal years and the disclosed successor inception period, with the separate predecessor stub retained. Earlier discrete quarterly balance sheets, product profits and pre-IPO public EPS are unavailable on a comparable basis in the saved sources. Fifteen months of daily prices were requested, but trading began only inFebruary2026. These are limitations, not zeros. Raw statement tables, source URLs, hashes, fetch times, mathematical identities and the market snapshots are preserved for review.Adjusted EBITDA is the company’s non-GAAP operating proxy, not cash flow. FCF in this packet means operating cash less all PPE purchases. FCFF in the model is cash available to all operating capital providers before debt financing, and therefore requires a net-debt bridge to equity. The EPS route already reflects interest and is not reduced by net debt twice. Opco rights are counted in a full-conversion economic model; ClassB shares alone do not receive public dividends. The TRA is modeled on a matched tax-benefit basis, with gross acceleration risk shown separately. These definitions keep each number attached to the economic claim it actually measures.Educational research only. Not financial advice. Read the complete research and dated assumptions at chargedalpha.com.