Understanding FuelCell Energy Stocks – The Importance of Knowing Its Fundamentals

FuelCell Energy logged a -4.0% change during today's morning session, and is now trading at a price of $1.38 per share.

FuelCell Energy returned losses of -68.0% last year, with its stock price reaching a high of $4.49 and a low of $1.31. Over the same period, the stock underperformed the S&P 500 index by -78.0%. As of April 2023, the company's 50-day average price was $1.9. FuelCell Energy, Inc., together with its subsidiaries, manufactures and sells stationary fuel cell energy platforms that decarbonize power and produce hydrogen. Based in Danbury, CT, the small-cap Energy company has 513 full time employees. FuelCell Energy has not offered a dividend during the last year.

An Exceptionally Strong Balance Sheet:

2018-01-11 2019-01-10 2020-01-22 2021-01-21 2021-12-29 2022-12-20
Revenue (k) $95,666 $89,437 $60,752 $70,871 $69,585 $130,484
Gross Margins 3.0% 3.0% -35.0% -11.0% -22.0% -23.0%
Operating Margins -46% -50% -110% -55% -93% -110%
Net Margins -56.0% -53.0% -128.0% -126.0% -145.0% -109.0%
Net Income (k) -$53,903 -$47,334 -$77,568 -$89,107 -$101,055 -$142,722
Net Interest Expense (k) -$9,171 -$9,055 -$10,623 -$15,294 -$7,363 -$6,394
Depreciation & Amort. (k) -$8,518 -$8,648 -$12,353 -$19,377 -$19,872 -$21,274
Earnings Per Share -$13.73 -$9.02 -$1.82 -$0.42 -$0.32 -$0.38
EPS Growth n/a 34.3% 79.82% 76.92% 23.81% -18.75%
Diluted Shares (k) 4,158 6,893 55,081 221,960 323,983 383,139
Free Cash Flow (k) -$59,494 $26,350 -$28,421 -$36,399 -$64,085 -$91,089
Capital Expenditures -$12,351 -$10,028 -$2,151 -$382 -$6,353 -$21,078
Net Current Assets (k) $8,537 -$33,195 -$113,533 -$35,152 n/a n/a

FuelCell Energy has slimmer gross margins than its peers, consistently negative margins with a negative growth trend, and an unconvincing cash flow history. On the other hand, the company benefits from an excellent current ratio and a strong EPS growth trend. Furthermore, FuelCell Energy has weak revenue growth and a flat capital expenditure trend.

FuelCell Energy does not have a meaningful trailing P/E ratio since its earnings per share are negative. Its forward EPS guidance is negative too, at $-0.28. The average P/E ratio for the Energy sector is 7.54. On the other hand, the market is undervaluing FuelCell Energy in terms of its equity because its P/B ratio is 0.88. In comparison, the sector average is 1.68.

Analysts Give FuelCell Energy an Average Rating of Hold:

The 8 analysts following FuelCell Energy have set target prices ranging from $1.5 to $3.0 per share, for an average of $2.49 with a hold rating. As of April 2023, the company is trading -23.7% away from its average target price, indicating that there is an analyst consensus of strong upside potential.

FuelCell Energy has an unusually large proportion of its shares sold short because 15.3% of the company's shares are sold short. Institutions own 50.4% of the company's shares, and the insider ownership rate stands at 0.18%, suggesting a small amount of insider investors. The largest shareholder is Blackrock Inc., whose 10% stake in the company is worth $58,663,792.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.