FuelCell Energy (NASDAQ: $FCEL) focuses on increasing revenues, reducing operating costs, growing rapidly, and partnering up to find innovative solutions.
FuelCell Energy (NASDAQ: $FCEL) is a global leader in design, manufacturing, installing, and maintaining affordable and eco-friendly fuel cell power systems. The company was founded in 1969 in, Danbury CT, went public in 1992, and now has 16 international subsidiaries. Its primary business is stationary fuel cell power plants for distributed power generation.
They establish long-term relationships with clients by being involved in the entire life cycle of the plant. They do so by providing a range of long-term services such as:
- global monitoring,
- preventive maintenance,
- technical expertise,
- sustainable plant recycling,
The firm’s work is additionally involved in the capture of energy. Their customer base includes large utilities, industrial applications, even large municipal users.
FuellCell Energy closed at $2.85 as of 13th November 2020, near its 52-week high of $3.50 and its 52-week low has been $.48. Their EPS is – $.58 over the last twelve months.
EPS grew at 93.26% over the period, but their revenue is down nearly 4%.
FuelCell Energy’s outlook in the current scenario.
$FCEL began a collaboration with ExxonMobil (NYSE: $XOM) in 2019 to better understand and increase efficiency in separating CO2 from exhaust of natural gas power generation. This later developed into a partnership worth $60 million in 2019 – and includes the megawatt-scale fuel cell systems.
This partnership aims to find ways to reduce the costs that are currently involved in the carbon capture and storage (CCS) process. While increasing the electricity produced in a power plant while reducing the CO2 emissions.
During the earnings call CEO Jason Few announced that in the first three-quarters of their fiscal 2020 $FCEL brought in 88% of the total revenue they received in 2019.
The company focuses on safety, which is why they shut down their fabrics when COVID-19 hit, causing a serious backlog of orders. Despite this, FuelCell Energy has managed to restore its factory operations while retaining all its payroll employees with benefits.
While it’s not defined in terms of size, $FCEL has a project backlog that the new management aims to bring down. This likely reflects the 25% increase in the company’s generation portfolio compared to 2019. However, they incurred heavy costs of early replacements.
To finance the execution of the piled-up backlog, pay their debts, and build working capital, $FCEL planned to sell an additional $75 million worth of common stock.
As of Q3, the company raised net proceeds of $85 million (excluding fees and warrants).
The CEO states there was strong retail and institutional demand for the shares but does not mention the dilutive effect those sales may have had on current shareholders.
In the Korean market, FuelCell Energy canceled a licensing agreement with POSCO Energy, who used to deal with their Korean and Asian customers. Instead, $FCEL will market, sell, and service Korea and other Asian markets directly.
Like some other fuel cell energy corporations, FuelCell Energy has begun producing hydrogen through its SureSource power plants, which also generates clean energy and useful heat.
FuelCell Energy is on the right path to clear its backlog, provide great service and product support while implementing efficient cost-reducing strategies.
Now with the green stocks running ahead of themselves, it’s to expect some volatility. The company is surely one to follow, yet your risk tolerance should dictate when to jump on the train. Certainly, not all of the emerging players in the industry will prevail.
We see a bright future for FuelCell Energy. 📈