FuelCell Energy Misses Revenue Estimates; Street Says Hold

FuelCell Energy reported lower-than-expected revenue for 1Q due to a decrease in licensing revenue as well as the temporary closure of fuel cell plants. Shares of the manufacturer of fuel cell technology platforms were down about 9% in the pre-market trading session today.

FuelCell Energy’s (FCEL) revenue decreased by 9% year-over-year to $14.88 million, from $16.26 million in the comparable year-ago period, and lagged analysts’ estimates of $22.11 million. Its service and license revenue as well as generation revenue witnessed year-over-year declines of 12% and 10%, respectively.  The decrease in generation revenue was due to a temporary shutdown in Bridgeport fuel cell project plants for scheduled module exchanges.

The company’s diluted loss per share was $0.15 in 1Q, compared to a diluted loss per share of $0.20 in the year-ago period, and lagged analysts’ estimates of a net loss per share of $0.04.

Under its powerhouse business strategy, the company remains focused on making its technologies such as distributed hydrogen, electrolysis and hydrogen production and durable energy storage commercially available.

The company’s President and CEO Jason Few said, “We are excited to announce that we made tangible progress in our decarbonisation development efforts by producing hydrogen with our solid oxide electrolysis platform at our headquarters in Connecticut. Additionally, we continued to advance our joint research with ExxonMobil Research and Engineering Company (EMRE) on fuel cell carbon capture solutions.”  (See FuelCell Energy stock analysis on TipRanks)

On March 5, J. P. Morgan analyst Paul Coster reiterated a Sell rating on the stock and lowered the price target to $9 (47% downside potential) from $10. Commenting on the recent correction in the J. P. Morgan renewable index, Coster said, “It will have lingering effect on multiples, particularly the more speculative hydrogen pure-play stocks.”

Turning to the rest of the Street, FuelCell Energy has a Hold consensus rating alongside an average analyst price target of $11.67 (31.5% downside potential). That’s based on 3 Holds and 1 Sell. Shares have rallied by a massive 1,381% over the past year.

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