Forgent Power Solutions (FPS) IPO'd Feb 5 at $27, now trading $33.76 (+25% in 3 days). PE roll-up (Neos Partners, 82% control) of four electrical distribution equipment manufacturers. Products: switchgear, transformers, PDUs, power skids for data centers (42% of revenue), grid (23%), industrial (19%).

The Signal: Backlog Acceleration

Backlog trajectory is extraordinary:

• Jun 2024: $639M
• Jun 2025: $850M
• Sep 2025: $1,027M
• Dec 2025: $1,493M

That's $466M added in ONE quarter (Q2 FY26, Oct-Dec 2025). For context, that's 53% of FY25 annual revenue ($753M) booked in 90 days. 37% of Sep backlog from new customers. Backlog mix shifting toward data centers (47%, up from 42% of revenue).

Cross-Ticker Convergence

FPS isn't isolated. Eight independent companies across the electrical/power supply chain reported the same pattern in the last 90 days:

This isn't company-specific alpha. This is confirmed secular demand for data center electrical infrastructure. Our worldview has 784 evidence items on datacenter power themes - this is THE pattern.

The Capacity Story

FPS claims capacity to support $5B revenue by end CY2026 after $205M capex in 1.8M sq ft expansion. Currently at ≈$1.1B run rate = ≈22% utilization of target capacity. Lead times 33-65% shorter than industry average (per Nov 2025 assessment).

If true, this is compelling. $5B at 22% EBITDA margins (current trajectory) = $1.1B EBITDA potential. But "if true" is carrying a lot of weight. Going from roll-up (4 acquisitions in 8 months, 2023-2024) to scaled manufacturer executing $5B is the hard part. First full fiscal year as combined entity was FY25.

The PE Exit Structure

Classic sponsor monetization:

• IPO proceeds: $428M goes entirely to redeem Neos affiliates' Opco interests
• ZERO proceeds to company for growth or debt paydown
• Debt stays at $584M (net debt ≈$478M, 2.3x EBITDA)
• Tax Receivable Agreement: 85% of tax savings go to Neos (ongoing cash drain)
• 82% voting control retained via Up-C structure
• 180-day lockup expires ~Aug 2026 - massive overhang when Neos wants to exit

This is not growth capital raising. This is Neos selling into AI/datacenter hype.

Valuation

At $33.76:

• Market cap: ≈$7.8B
• EV: ≈$8.3B (adding $478M net debt)
• EV/Revenue: 9.4x (on ≈$882M LTM)
• EV/EBITDA: 43x (on ≈$191M LTM Adjusted EBITDA)
• P/E: 422x (GAAP burdened by $59M/yr intangible amortization, $35M interest, $17M sponsor fees)

Comps:

• POWL: 37.9x P/E, data center switchgear, higher margins, longer track record
• VRT: 74.0x P/E, $7B+ revenue, established data center power player
• ETN: 35.7x P/E, broad electrical distribution

FPS trades at premium to established peers on revenue multiple basis. Market is pricing in the $5B capacity story before it's been proven.

What We Don't Know

• Backlog conversion rate: How fast does $1.5B backlog turn into revenue? FY25 was $753M on $850M backlog. If conversion accelerates, revenue could inflect hard.
• Street estimates: Zero analyst coverage yet (fresh IPO). When coverage initiates, if analysts anchor on $1.1B run-rate and backlog suggests $1.5-2B achievable in FY27, first earnings beat could be significant.
• Execution risk: Can they actually ramp from $1.1B to $5B? That's 4.5x growth. Management has Vertiv/Schneider pedigree (CEO ex-Vertiv, CCO ex-Schneider), but this is the playbook at untested scale.
• Competitive overlap: RRX's e-Pod is modular DC power management (switchgear, ATS, PDUs) - same products FPS makes. RRX targeting $1B from $120M. Validation of TAM, but also well-capitalized competitor entering your market.

Net Assessment

Real business. Genuine tailwinds. Priced for perfection.

The backlog acceleration ($466M in one quarter) is extraordinary and independently confirmed by 8+ supply chain signals. Data center electrical infrastructure is the strongest cross-ticker pattern in our worldview. The demand is real.

But FPS is a 3-day-old IPO trading at 43x EBITDA with PE sponsor taking $428M out (zero to company), $584M debt staying on the books, and 82% overhang unlocking in ≈6 months. The $5B capacity story is priced in before execution has been proven.

No edge on day 3 of trading. Everything above is S-1 data. The alpha was in positioning before IPO (impossible for retail) or waiting for execution data.

What to Watch

1. First earnings report (likely Apr-May 2026 for Q3 FY26) - backlog conversion rate, EBITDA margin trajectory as new capacity comes online
2. Analyst coverage initiation - where do estimates land vs $1.5B backlog?
3. Lockup expiry (~Aug 2026) - Neos holds 82%, massive supply event
4. Capacity ramp execution - are they actually filling 1.8M sq ft and hitting $5B run-rate by end CY26?
5. Backlog mix - is DC percentage continuing to increase (higher margin, faster growth)?

Watchlist for first earnings. If stock corrects to 30-35x EBITDA on execution data or lockup selling, and backlog conversion proves out, the thesis re-rates. At 43x on day 3, you're paying for the dream before the work is done.