Is Fluor (FLR) a Bargain Opportunity Amid Recent Weakness and Strong Backlog?

Fluor Corporation (FLR) has experienced a significant selloff in 2025, with shares down approximately 17.5% year-to-date as of September 9, 2025Fluor (FLR): Assessing Value After Revenue Drop, Backlog^[1]. This decline has been driven by a 6% year-over-year revenue drop and a 49% plunge in adjusted earnings per share, attributed to sector-specific headwinds in oil and gas, battery chemicals, and mining, as well as project delays and cost overruns under fixed-price contracts1 Reason Now Is a Great Time to Buy Fluor (FLR) Stock^[2]. However, beneath the surface of this weakness lies a compelling value proposition for long-term investors. With a robust backlog of $28.2 billion and a strategic stake in NuScale Power—a nuclear energy startup poised to benefit from AI-driven demand for clean energy—Fluor's fundamentals suggest it may be undervalued despite its near-term strugglesGlobal Engineering, Procurement & Construction Company | Fluor^[3].

The Case for Value: Backlog and Fair Value Discount

Fluor's $28.2 billion backlog, though down 12% year-over-yearFluor (FLR): Assessing Value After Revenue Drop, Backlog^[4], remains a critical asset. This backlog spans diverse sectors, including industrial infrastructure, government contracts (such as its recent three-year logistics support agreement with the U.S. Army in BavariaFluor Awarded U.S. Army Europe’s Logistics Support Services Contract in Bavaria^[5]), and power projects. For value investors, the backlog represents a pipeline of future revenue, even if current earnings are pressured. A discounted cash flow (DCF) model estimates Fluor's fair value at $49.89 per share1 Reason Now Is a Great Time to Buy Fluor (FLR) Stock^[6], significantly above its current price of $40.45 as of September 9, 2025Global Engineering, Procurement & Construction Company | Fluor^[7]. This 19% discount to intrinsic value suggests the market is pricing in pessimism that may not align with the company's long-term potential.

The stock's forward price-to-earnings (P/E) ratio of 16.5 also appears attractive, trading below its five-year average of 17.4Fluor (FLR): Assessing Value After Revenue Drop, Backlog^[8]. This discount reflects broader market skepticism about Fluor's ability to navigate sector-specific challenges, but it also creates a margin of safety for investors willing to bet on its eventual recovery.

Risks to Consider: Fixed-Price Contracts and Financial Leverage

While the backlog is a strength, Fluor's reliance on fixed-price contracts introduces operational risks. Cost overruns—common in complex engineering and construction projects—have already pressured profitability, contributing to the 49% drop in EPSFluor (FLR): Assessing Value After Revenue Drop, Backlog^[9]. Additionally, the company's leadership has revised 2025 guidance downward, citing ongoing market uncertaintiesFluor (FLR): Assessing Value After Revenue Drop, Backlog^[10]. These factors highlight the need for caution.

Though specific 2025 debt-to-equity and free cash flow figures are not disclosed in recent reportsFluor Corporation - Wikipedia^[11], Fluor's financial health remains a concern. A declining backlog and weak earnings suggest liquidity pressures could emerge if project execution issues persist. Investors should monitor the company's interest coverage ratio and leverage metrics in upcoming filings to assess its ability to service debt while funding operations.

Strategic Positioning: NuScale and the Energy Transition

One of Fluor's most promising assets is its majority stake in NuScale Power, a nuclear energy startup. As global demand for reliable, low-carbon power grows—particularly to support AI data centers—NuScale's modular reactor technology could become a significant revenue driver1 Reason Now Is a Great Time to Buy Fluor (FLR) Stock^[12]. This strategic alignment with the energy transition adds a layer of long-term value that is not fully reflected in Fluor's current stock price.

Conclusion: A Calculated Bet on Resilience

Fluor's recent weakness has created an entry point for value investors who can tolerate near-term volatility. The company's discounted valuation, combined with a strong backlog and strategic investments in high-growth sectors like nuclear energy, suggests it is trading at a discount to intrinsic value. However, risks such as fixed-price contract exposure and sector-specific headwinds warrant careful monitoring. For those willing to conduct due diligence on Fluor's financial metrics and project execution capabilities, the stock could represent a compelling long-term opportunity.