FTAI, NVEC, DUOT Updates
FTAI received its first power turbine order, NVEC blowout earnings, DUOT keeps executing...
Disclosure: I may buy or sell shares without notice. This article reflects my personal opinions and is provided for informational and educational purposes only. It is not financial advice. Readers should conduct their own research and consider their individual risk tolerance.
Hello!
I just want to keep you up to date on these three names that I own. As of today, FTAI is ~46% of my port, DUOT 7.87% and NVEC 2% (I cut my exposure substantially last week for risk management purposes).
FTAI: power turbine is on track, first order received
Big day for FTAI. It looks like the conversion from old CFM56 engines to Mod-1 power turbines is being well executed. FTAI announced a $1.465B gas turbine generator set order via their JV with Jereh.
I cannot wait for the earnings call so we can learn more about the unit economics of this deal. My hunch, however, is that this order does not represent the full 100 Mod-1 sets projected for 2027.
After the JV announcement, management made it clear that the unit economics, read: EBITDA, would remain roughly the same under the new structure with Jereh. That would imply an expected Adjusted EBITDA contribution of approximately $700M from the full 2027 power turbine fleet.
Judging by the numbers in the announcement, I believe a substantial portion of the fleet is already committed, perhaps 50 to 60 units, but there is still more to go. Management said they were almost sold out for 2027, which means we should hear about another deal in the coming months.
However, the most important takeaway is this: the engines have been successfully converted, they work, and final testing is in its late stages, with everything unfolding as planned.
Following the news, we got another price target increase from an analyst. This time, BTIG raised its target from $340 to $400.
For me, nothing has changed. The story has only improved. I wish I could own more.
NVEC: blowout earnings
There is not much to say about NVEC’s earnings: it was a blowout and, in my view, an inflecting quarter. Management sounded very optimistic on the call. They did not provide guidance, which they typically do not, but they said the quarter validated their strategy and growth potential and reiterated that they are very bullish about the future.
Look at those numbers:
Gross profit up 82%. Not sales, gross profit.
Diluted EPS up 78%.
There is not much else to say about NVEC. The inflection came, perhaps earlier than I thought.
Here is where I am with NVEC: I still want to hear more about the sales mix across robotics, power conversion, data centers and the other end markets they are targeting. The most important tidbit from the call was that management sees automation and robotics as probably its strongest-growing and most promising area, particularly because of the precision and low-power advantages of NVEC’s products.
Where do I see NVEC PT-wise? If management’s optimism is confirmed over the next few quarters, I believe FY2026 EPS of approximately $5.20 is realistic. That would also justify a higher multiple.
Simple math: $5.20 in EPS at a 25x P/E gives us a $130 price target.
DUOT: keeps executing and is on track to meet its FY2026 guidance
Management is aiming at 25 MW contracted this year. With last week’s announcement DUOS now has 20 MW contract, with 5 MW to go.
It also looks like the headline revenue economics may be slightly more favourable than previously expected. The latest 10 MW agreement is worth more than $111M over five years, which works out to more than $2.2M in annual revenue per MW. On the last earnings call, management said revenue would be “a little under $2 million” per MW.
Duos also continues to trade at a significant valuation discount to larger high-density colocation names such as Core Scientific. Once revenue from these edge data centers begins showing up meaningfully in the income statement over the next few quarters, I believe Duos can begin closing that valuation gap.
My thesis remains that Duos could eventually command a premium because of its ability to rapidly deploy modular EDCs in a power-constrained and increasingly regulated data center market. In a market where access to power and speed to deployment are becoming increasingly valuable, Duos appears to have built its business around solving exactly those problems.