Enerflex (EFX) rallied 14% today on a >1GW contract win for natural gas-fired power generation units to support a data center project. Combined with a 450 MW contract two weeks ago, the backlog has grown to >1.75 GW, with deliveries extending through 2028.

Recall that the North American Engineered Systems segment drives roughly half of the company’s revenue…

… and has a rapidly building backlog, underpinned by a 7 GW opportunity pipeline for distributed power applications.

The big win is supported by the company’s $100M of planned investment in facilities and capabilities…

… and the resulting growth in its Engineered Systems installed base creates a funnel into its higher margin, more stable aftermarket services business…

… which investors are beginning to price in, with the multiple sitting two turns above average - reflecting increased confidence in EFX’s data center opportunity.

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