Forgent Power Solutions, Inc. (NYSE: FPS) stock fell more than 7% in Thursday's premarket trading, giving back part of Wednesday's 14.39% surge following CoreWeave's strong earnings release.

The decline came despite Forgent reporting better-than-expected fiscal first-quarter 2027 results Thursday and raising its full-year forecast.

Forgent reported adjusted earnings of 24 cents per share, beating analysts' estimate of 20 cents.

Revenue jumped 69% year over year to a record $478.57 million, topping expectations of $462.36 million.

Higher production volumes and better cost absorption helped the company exceed the high end of its revenue and adjusted EBITDA forecasts.

Adjusted EBITDA rose 61% to $105 million from $65 million a year earlier. However, the adjusted EBITDA margin narrowed to 21.9% from 23.0%.

Operating cash flow climbed $130 million year over year to $136 million, supported by higher earnings and favorable timing of customer deposits and milestone payments.

Capital expenditures totaled $32 million. Separately, Forgent continued investing in inventory to support higher production volumes.

Forgent Raises Fiscal 2027 Forecast

Forgent raised its fiscal 2027 adjusted earnings forecast to $1.30-$1.44 per share from $1.26-$1.40. Analysts expect $1.35 per share.

The company also raised its annual revenue forecast to $2.45 billion-$2.65 billion from $2.40 billion-$2.60 billion. Wall Street expects $2.546 billion.

Forgent increased its adjusted EBITDA forecast to $587 million-$637 million from $575 million-$625 million.

CEO Gary Niederpruem credited strong customer demand, improved production and a robust order backlog for the higher forecast.

He said the company's backlog fully supports its updated fiscal 2027 outlook.

Niederpruem highlighted growing traction with multiple frontier AI labs and hyperscalers. The company expects orders from these customers to build through fiscal 2027 and into fiscal 2028.

With much of its expanded manufacturing capacity now operational, Forgent is focusing on boosting productivity, improving sourcing and increasing efficiency.

FPS Price Action: Forgent Power Solutions shares were down 7.20% at $22.80 during premarket trading on Thursday, according to market data.