Fervo Energy Stock Rallies 16% Ahead of First Results Since Cape Station Plant Began Delivering Power

Shares of Fervo Energy Co. rallied about 16% heading into the geothermal power developer's first quarterly report since its flagship Utah plant began commercial operations.

Fervo shares closed Friday at $9.03, up $1.23, or 15.85%. Volume reached about 9.05 million shares. The stock was valued at about $2.7 billion but remained about 75% lower than a year ago.

The stock has fallen sharply since its peak. Its 52-week range runs from $7.64 to $42.65.

Third-quarter results

Fervo reported results on Monday. The company declared commercial operation at Cape Station Phase I GeoBlock 1 on Sept. 30, ahead of its contractual commercial operation date.

Revenue was minimal as the plant only just came online. Fervo reported third-quarter revenue of $116,000, net income of $11.66 million, an operating loss of $43.75 million and a loss per share of 7 cents.

Costs are rising as the company grows. General and administrative expense rose to $39.4 million from $27.4 million in the second quarter, reflecting higher stock-based compensation, public company costs and headcount growth.

Spending remains heavy. Third-quarter capital expenditures were $256.7 million, compared with $226.5 million in the second quarter, mainly for Cape Station.

Google deal

The company's biggest customer is a major tech company. Fervo signed a 15-year enhanced geothermal power purchase agreement with Google for 396 megawatts, with an option to expand by 600 megawatts.

Its contracted capacity has reached 1,054 megawatts, worth $11.9 billion.

Outlook

The company maintained its targets. Fervo expects fourth-quarter 2026 revenue in line with prior expectations, maintained its 2027 revenue outlook and projected fourth-quarter capital expenditures of $450 million to $500 million, below its prior forecast.

The coming quarter is significant. The fourth quarter will be the first full period of revenue from Cape Station.

Analyst views

Analysts see substantial upside from current levels. Needham initiated coverage with a Buy rating and a $17 price target on Nov. 6. The consensus rating is Strong Buy with a price target of $34.07.

Valuation estimates have come down, however. Simply Wall St's analyst fair value estimate for Fervo fell from $25 to $16, reflecting lower peer group multiples and updated expectations around the timing of key projects such as Cape Station.

Investor event

Investors will get a closer look soon. Fervo will host an investor open house at Cape Station on Nov. 19, with tours of the drill rig and power plant.