Episode Details

Fervo Energy (FRVO) Q2 2026 — Revenue of $113 THOUSAND, a $55.9M net loss and GAAP EPS of -$0.38. Fervo raised its 2030 target to 1.1 GW and moved 400 MW into Advanced Development - and the stock fell 16.59% to $20.16. The 8-K landed 7:05am ET, before the open. Fervo raised its 2030 target by 100 MW to 1.1 gigawatts, moved 400 MW into Advanced Development and added 10.5 GW of new GeoClusters - and the stock still fell 16.6%. Here is what did NOT move: the contracted book. 658 megawatts of binding PPAs at 31 December 2025, 658 at 31 March 2026, and no offtake update in this morning's release. Every gigawatt of headline came from the supply side. And the prospectus discloses a deliverability gap on power already sold: Cape Station Phase II holds ~290 MW of interconnection rights against 384 MW contracted to SCE and Clean Power Alliance - a 94 MW shortfall. THE CALL: AVOID (3/5, A PRICE CALL, NOT A TECHNOLOGY CALL) — base-case value ~$10.0 vs ~$20.16 today. KEY METRICS: - CALL: AVOID 3/5, fair value $10.00 vs the $20.16 close - about 50% below, and 78.4% below the Street's $46.38 average. Bear $4, base $10, bull $18. - EVEN OUR BULL CASE IS UNDERWATER: $18.00 is 10.7% below the close. No branch of our model makes $20.16 the cheap side of the trade. - THE ANGLE: 658 MW of binding PPAs at 31 Dec 2025 and 658 MW at 31 Mar 2026 - unchanged for nine months, and no offtake update in the Q2 release. - THE GAP: Cape Station Phase II holds ~290 MW of interconnection rights against 384 MW sold to SCE and Clean Power Alliance - a 94 MW shortfall. - THE PRINT: revenue $113 THOUSAND vs $0. Operating loss $28.7M. Net loss $55.9M vs $11.4M. GAAP EPS -$0.38 on 157,003K weighted shares. - THE EPS TRAP: -$3.72 to -$0.38 is the DENOMINATOR - weighted shares went ~9.5M to 157.0M at the IPO. The net loss GREW 75.7% to $55.9M. - Interest income of $10.5M on the IPO cash is 93x the $113K revenue line. G&A hit $27.4M from $9.5M; $35.5M of other expense is not itemised. - THE BURN: capex $226.5M vs $108.0M a year ago, with $850-900M guided for H2 - about 43% of the IPO cash out the door before Christmas. - NOTHING IS IN SERVICE: D&A was $344 THOUSAND against $1,235.2M of construction-in-process. Depreciation starts when GeoBlock 1 energises. - VALUATION: 294,654K A+B shares at $20.16 = $5.94B equity; less $2.12B cash, plus $228.4M debt and $187.0M minorities = $4.24B EV on 0 MW. - PER KILOWATT: $8,476 per kW under build, $6,441 per contracted kW, $3,853 per kW of the 2030 target - vs Fervo's own $5,500/kW Phase II cost. - OUR MODEL USES FERVO'S OWN NUMBERS: the prospectus assumes $115/MWh, an 83% capacity factor and $160/kW-yr O&M, giving $650-700K EBITDA per MW. - OPERATIONALLY STRONG: Sawtooth 7 hit ~19,500 ft in a 460F resource in 21 days, a company record. Cost curve ~$7,000/kW to $5,500 to $3,000. What to watch: UP: a genuinely new binding PPA would break the thesis - the book has read 658 MW since December; interconnection rights beyond the 290 MW at Phase II would close the 94 MW gap; first power at GeoBlock 1 landing in Q4 2026 on schedule; and Phase II hitting the targeted $5,500/kW, on a curve running from ~$7,000/kW toward a $3,000 goal. DOWN: any slip in the Q4 first-power date; capital spending running past the $850-900M guided for H2 against $2.106B of cash; the Google framework lapsing without a binding PPA; and an equity raise struck at a depressed price, with the stock already 25.3% below its $27.00 IPO price. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision. Learn investing free in the Charged Alpha app: https://chargedalpha.com/app?source=youtube&ref=video Educational only. Not financial advice.