Why Is FuelCell Energy (FCEL) Stock Down 20% Today?

  • FuelCell Energy (FCEL) stock slipped nearly 20% on Tuesday after a disappointing fourth-quarter earnings call.
  • Despite growing revenue, the company’s losses only widened in both Q4 and full-year 2022.
  • According to leadership, FuelCell is in a “period of transition,” with some analysts projecting it won’t turn a profit for at least six or seven years.
a picture of a fuel cell
Source: Kaca Skokanova/Shutterstock

FuelCell Energy (NASDAQ:FCEL) stock fell nearly 20% on Tuesday on a wider-than-expected fourth-quarter earnings loss. Now, shares are back in the green by more than 7% as of this writing. What do you need to know about FCEL stock today?

Well, on Tuesday, the battery maker released its Q4 financial results. The company failed to meet both top and bottom line estimates, despite strong sales growth.

In its earnings call, FuelCell revealed an EPS loss of 11 cents, compared to the expected EPS loss of 7 cents. The company also failed to meet sales expectations, booking just $39.2 million in revenue compared to estimates of $43.8 million, a more than 11% miss. That marks the fourth-straight quarter the company has failed to meet consensus EPS expectations.

According to Jason Few, President and CEO of FuelCell, the company is in something of a transition period.

“FuelCell Energy is in a period of transition, investing across our business to support the strong market opportunity that we believe exists for our Company. Growth investment was reflected in the fiscal year 2022 results as we advanced platform commercialization and investment, increased engineering capability, as well as expanded sales and marketing talent and activities. As we transition into fiscal year 2023, these investments will grow and accelerate as we deploy capital for plant, equipment and the talent needed to meaningfully increase the total manufacturing capacity across our technology platforms.”

FCEL Stock Slides on Growing Losses

Even despite the company’s many shortcomings this year, FuelCell still managed to grow sales more than 180% since the same quarter last year. Unfortunately, the company has seemingly managed to increase costs at an accelerating rate as well, leaving many analysts wondering when it can expect to turn a profit. According to one S&P Global Market Intelligence poll, the earliest investors can expect FuelCell to start making a profit is 2028 or 2029.

For many investors, this is clearly too far out to merit an investment in FCEL stock. After all, FuelCell’s EPS losses increased by 23% to 38 cents for full-year 2022. It’s hard to imagine the company in the green when it continues to tread further in the red.

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On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

With degrees in economics and journalism, Shrey Dua leverages his ample experience in media and reporting to contribute well-informed articles covering everything from financial regulation and the electric vehicle industry to the housing market and monetary policy. Shrey’s articles have featured in the likes of Morning Brew, Real Clear Markets, the Downline Podcast, and more.

Article printed from InvestorPlace Media, https://investorplace.com/2022/12/why-is-fuelcell-energy-fcel-stock-down-20-today/.

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