Among the most exciting and often debated names in the alternative-energy space is FuelCell Energy (NASDAQ:FCEL). There is no shortage of strong opinions surround FCEL stock as traders engage in heated discussions about the prospects of this fascinating company.
As you may recall, last year there was talk of FuelCell Energy going bankrupt. A deal with Exxon Mobil (NYSE:XOM), which was valued at $60 million, may have saved FuelCell Energy from bankruptcy. There’s less talk of the company failing nowadays, but not everyone’s convinced that FCEL stock will finish 2020 higher than where it began.
Recent financial data should, however, provide a ray of hope to FuelCell Energy’s shareholders. As you’ll see, the company fared well in spite of the harsh global economic impact of the novel coronavirus.
A Closer Look at FCEL Stock
Part of what makes FCEL stock controversial among traders is its historical price action. During the bubble-icious year 2000, FCEL was literally trading in the thousands of dollars.
Nowadays, it’s classified as a penny stock by the U.S. Securities and Exchange Commission because FCEL trades under $5 per share. Moreover, this year the bulls attempted several times to push and hold the stock price above the key $3 level. Each time, they failed.
It’s not realistic to expect FCEL stock to regain its price levels from the heady days of the early 2000s. Yet, if the bulls can at least retake and hold $3 and then $4, it could be the beginning of a gradual but sustained path to recovery.
The Bad News Isn’t So Bad
In terms of financial data, the recent news hasn’t all been perfect for FCEL stock traders. Specifically, if investors were seeking guidance during FuelCell Energy’s second-quarter fiscal report, they were surely disappointed.
For both earnings and guidance, FuelCell Energy opted not to provide any guidance. Of course, this isn’t the only company to withhold its fiscal forward guidance this year. The coronavirus crisis has created a great deal of uncertainty, so investors should understand the company’s reluctance to make predictions.
It also should be noted that FuelCell Energy sustained a net loss for the second quarter. Yet, the quarterly net loss of $14.8 million, which translates to 7 cents per share, was in line with the analyst community’s expectations.
Besides, that figure marks a vast improvement over the net loss of $22.9 million, which amounts to $2.06 per share, posted during the comparable period of the previous year.
The Good News Is Really Good
So, the bears don’t have much data to feast on at the moment when it comes to FCEL stock. The bulls, on the other hand, have plenty to celebrate.
In particular, FuelCell Energy’s second-quarter revenues, at $18,880,000 million, easily beat the Wall Street consensus estimate of $15.5 million and marked a 104.86% improvement over the revenues of the same quarter of the prior year.
Additionally, FuelCell Energy recorded a quarterly operating loss of $8.1 million. That might not sound like great news, but it’s well below the operating loss of $17.6 million that was posted in the previous year’s comparable quarter.
In light of these heartening stats, Chief Executive Jason Few underscored FuelCell Energy’s accomplishments in the face of a challenging market landscape:
“Despite the challenges of the current global environment resulting from the COVID-19 pandemic, we continued to execute against our project pipeline and advanced our work with ExxonMobil Research and Engineering Company in pursuit of commercializing our proprietary carbon capture solution.”
Thus, FuelCell Energy’s partnership with Exxon Mobil might have accomplished more than rescuing the company from the brink of bankruptcy. It may, in fact, have cleared a path to greater market share and enhanced profitability for FuelCell Energy.
The Bottom Line
FCEL stock bears can always pick apart the data and find reasons to dislike FuelCell Energy. They have every right to express their opinions, but informed investors may prefer to avoid the heated debates and focus on the data, which at the moment is overwhelmingly positive.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.
