In the clean energy space, FuelCell Energy (NASDAQ:FCEL) has certainly been what many would characterize as a laggard. Shares of FCEL stock are down more than 35% on a year-to-date basis alone, and much more from its recent peak. However, this stock is moving higher in today’s session, surging around 10% in early afternoon trading.
This move follows an announcement from FuelCell Energy that it has struck a purchase and service agreement with Gyeonggi Green, a Korean “energy-focused company affiliated with Korea Hydro & Nuclear Power.”
Of course, more revenue is better than less, and building out a backlog of orders and revenue generation is important for companies, particularly those in the early-stage green hydrogen space. Let’s dive into what this agreement entails and what it means for investors.
FCEL Stock Surges on Purchase and Service Agreement
FuelCell Energy’s Deal with Gyeonggi Green Energy will provide 42 1.4-megawatt upgraded carbonate fuel cell modules to replace the company’s existing fuel cell modules at its power cell platform. This deal is notable because Gyeonggi operates the world’s largest fuel cell platform, indicating FuelCell Energy is now garnering global attention for its offerings.
As the world gravitates toward greener power solutions, hydrogen fuel cell systems will see higher demand. That’s been the bull thesis behind this stock for some time. And with energy prices rising across the board, it’s entirely possible more nations will look to hydrogen power as a much more efficient and less carbon-intensive energy form.
That said, FuelCell’s overall fundamentals are lacking, and value investors may still not see enough here to push this stock higher on a year-to-date basis. This announcement is certainly big news, and FCEL stock should be up big on the headline.
However, it’s still unclear to me how this stock will perform in the coming weeks and months, as it’s still trading in penny stock territory.
On the date of publication, Chris MacDonald 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.
