The stock prices 2026 deposit-driven cash as if it were permanent profit. 2027 free cash should fall toward $8 billion as reservations convert, so the shares belong nearer $820.
Key points
- $176 billion remaining performance obligations at June 30, with 116 GW of gas under contract.
- $11.5, 12.5 billion 2026 free-cash guidance is mostly customer advances, not earnings.
- GAAP operating margin was 5.9% in the June quarter; adjusted EBITDA is a different, looser measure.
The call
The $1,000 share price treats this year’s $12 billion cash print as a new, durable yield. That cash came from down payments on slot reservations. Management said the second half will convert those deposits into orders, so cash generation will drop.
I model 2027 revenue of $53 billion, 15.5% adjusted EBITDA, and $8 billion of free cash after working-capital reversal. At 26 times that cash and 258 million shares after buybacks, the stock is $820 in twelve months. The market is too optimistic.
Revenue and adjusted EBITDA path ($ billions)- Revenue
- Adj. EBITDA (desk)
Company filings through Q2 2026; 2026-27E are this desk's forecasts
Valuation
| Line | Figure |
|---|
| 2027 revenue (desk) | $53 billion |
| 2027 free cash (desk) | $8.0 billion |
| Cash multiple | 26 times |
| Equity value | $208 billion |
| Shares in 12 months | 258 million |
| 12-month target | $820 |
Twenty-six times 2027 cash is still a growth multiple for a capital-goods franchise that is expanding factories with customer money. If cash stays at $12 billion the stock is worth far more; if Wind stays a $400 million hole and deposits reverse, the loss is 25% or more. That asymmetry is a sell.
From today's price to the 12-month targetDesk arithmetic, October 8 2026
Risks
- Reservations convert faster than I assume and 2027 cash stays above $10 billion.
- Power and Electrification margins hold 18% while Wind reaches break-even.
- Data-center grid orders keep growing after Prolec is fully digested.
What would change my mind
A third-quarter print that keeps full-year free cash above $11 billion without a further rise in contract liabilities.