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After Reporting a Narrower-Than-Expected Q3 Loss, is FuelCell Energy a Buy? By StockNews


© Reuters. After Reporting a Narrower-Than-Expected Q3 Loss, is FuelCell Energy a Buy?

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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Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.