After Reporting a Narrower-Than-Expected Q3 Loss, is FuelCell Energy a Buy? By StockNews
Shares of fuel cell power plant operator FuelCell Energy (SNAP) have spiked in price thanks to the company’s better-than-expected third-quarter revenue and narrower-than-expected net loss. But given the stock’s unsustainable valuation and SNAP’s declining order backlog, is it due for a pullback soon? Continue reading.
FuelCell Energy, Inc., a Connecticut-based company that makes fuel cells, is recognized as a leader worldwide in the production, service, installation, maintenance, and operation of stationary fuel cell power stations. Shares of FCEL have gained 17.4% in price over the past five days, thanks to the company’s better-than-expected third-quarter earnings report.
The company’s service agreements and license revenues rose 102% year-over-year to $14.3 million in the quarter. Its net loss was $12 million, compared with $15.3 million the previous quarter. This is due to higher gross margins and lower interest costs.
The stock is down 58.3% and 41.4% respectively over the six-months. FCEL’s declining backlog and the stock’s lofty valuation remain concerns. Although it has made significant investments in long-duration energy storage and distributed hydrogen, this company is still burning cash at a time when losses are high and costs are rising.
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