FuelCell Energy (FCEL) reported Q1 results that fell short of Wall Street estimates despite interest in hydrogen fuel cells growing amid the Biden administration’s moves. So, is FuelCell stock a good buy? Take a look at FuelCell’s fundamentals and the FCEL stock chart.
X
The Danbury, Conn.-based company makes stationary hydrogen fuel cells for commercial and industrial customers as well as utilities.
The cells mix a gaseous form of hydrogen with oxygen to create electrical energy with water as the only byproduct.
But the energy is only as green as its inputs. Hydrogen needs to be stripped from other compounds, like water or natural gas. “Gray” hydrogen accounts for most of the hydrogen produced in the U.S. today. It comes from natural gas and releases carbon emissions during production and processing.
Still, improvements in solar and wind power could ramp up the production of cost-efficient “green” hydrogen.
FuelCell Stock Technical Analysis
FuelCell went public back in 1992 and its stock price had been stuck in the single digits for years. But that changed late last year as the election of Joe Biden as president sent fuel-cell stocks soaring.
Investments in hydrogen fuel cell technology for heavy machinery, large commercial vehicles, and power plants have picked up in the last year, also lifting FCEL stock.
But shares began falling from a peak in February and are facing some resistance at the key 50-day line. The relative strength line, which tracks performance vs. the S&P 500 index, is edging up slightly and the stock’s RS Rating is still at 96 out of a best possible 99.
FuelCell has an IBD Composite Rating of just 52 out of a best-possible 99. The key rating combines five other IBD stock ratings. Investors should focus on stocks with a Composite Rating of 90 or higher.
FCEL stock has an Accumulation/Distribution rating of B-, indicating more buying than selling by institutional investors.
IBD Live: A New Tool For Daily Stock Market Analysis
FCEL Stock Fundamentals
On March 16, FuelCell reported wider-than-expected losses for the first quarter as revenue also fell short of Wall Street estimates. The backlog decreased as well.
The company will report Q2 results before the market opens on June 8. Analysts see the hydrogen fuel cell maker reporting a loss of 5 cents per share, up from a 7 cent-per-share loss in the year-ago quarter. Revenue is seen rising 1.6% to $19.2 million.
Wall Street sees FuelCell posting a loss for this fiscal year and next year, although revenue growth is expected to accelerate to 47% in fiscal 2022 from 12% this year.
The company has yet to establish a consistent record of profits much less strong profit growth. CAN SLIM guidelines emphasize earnings and sales growth of 25% or more.
FCEL stock has a 49 EPS Rating. Its SMR Rating of D indicates weak sales growth, profit margins, and return on equity ratios.
IBD 50 Growth Stocks To Watch: Find The Best Stocks To Buy And Track
Investments In Hydrogen Fuel Cells Rise
Interest in hydrogen fuel cells has picked up as the U.S. returned to the Paris Climate Agreement and the Biden administration pushes for investment in greener energy infrastructure.
Even oil majors like Chevron (CVX) and Royal Dutch Shell (RDSA) are getting in on the action.
“I think hydrogen has huge potential going forward in transportation and power generation,” Saudi Aramco CEO Amin Nasser said during a panel at CERAWeek by IHS Markit in March.
Unlike conventional batteries, hydrogen fuel cells don’t need long periods of recharging. That’s critical for power stations, for example, as they can’t go offline for long.
Bloom Energy (BE) is also active in the stationary fuel cell market.
Others like Ballard Power (BLDP) and Plug Power (PLUG) are working on mobile fuel cells for use in buses and electric trams.
IBD Stock Of The Day: See How To Find, Track And Buy The Best Stocks
Is FCEL Stock A Buy?
FuelCell Energy shares are not in a buy zone and not forming any type of chart pattern. The stock is also below its 50-day line.
Bottom line: FCEL stock is not a buy.
Investors can check out IBD Stock Lists and other IBD content to find dozens of the best stocks to buy or watch.
Follow Gillian Rich on Twitter for energy news and more.
YOU MAY ALSO LIKE:
A Clean-Energy Technology Elon Musk Hates May Be Near A Big Breakthrough
Is PLUG Stock A Buy Now After Tumbling On Accounting Errors?
These Are The 5 Best Stocks To Buy And Watch Now
Looking For Market Insights? Check Out Our IBD Live Daily Segment
Looking For The Next Big Stock Market Winners? Start With These 3 Steps
