It’s still earnings season, with a number of high-profile companies yet to report. One such company that’s in the spotlight ahead of its earnings release on June 8 is FuelCell Energy (NASDAQ:FCEL). Today, FCEL stock has surged more than 6% in anticipation of the company’s earnings.
Many in the finance community are already calling this earnings report a “make or break” moment for FuelCell Energy. That’s partly due to the fact that companies in the clean energy space, particularly hydrogen companies like FuelCell Energy, haven’t shown strong financial performance, or a path toward profitability, in the past. Shareholders want to see some probability of return over time. And while revenues may be growing (more than 40% year-over-year last quarter), the company is still posting losses. A turnaround on the company’s bottom-line performance will likely need to be seen for this stock to justify its move today.
With that said, let’s dive into what the market is expecting ahead of FuelCell Energy’s earnings report.
FCEL Stock Up Ahead of Earnings Report
As mentioned, FuelCell Energy will report its Q2 earnings before market open on Thursday, June 8. Analysts expect the company to post a net loss of 8 cents per share, smaller than the 8-cent loss per share seen in the same quarter last year. Additionally, revenue is anticipated to grow to $25.45 million, up from $16.38 million a year prior.
That’s some impressive top-line growth, translating to around 55% top-line growth. This would mark an acceleration on the company’s top line. And with losses coming in, perhaps there’s something to be excited about. If FuelCell Energy can find ways to improve its profitability further and post a narrower loss (or even eke out a small gain), it’s possible we could see this stock move much more rapidly to the upside. At least, that’s the kind of risk/reward bet many investors appear to be making today.
To be sure, FCEL stock appears to remain a speculative bet at current levels. Despite today’s 7% rally, FCEL stock is still down approximately 15% for the year. Thus, there’s some longer-term bearish momentum behind this stock, which could materialize on any sort of missteps noted in the report.
Personally, I think this particular green energy play is likely to be too volatile for my blood in the next few days.
On the date of publication, Chris MacDonald did not have (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.
