FuelCell Energy (NASDAQ: FCEL) has seen an incredible amount of growth on Wallstreet. The stock has gained 281% over the past year of trading. FCEL, alongside its competitor PLUG Power have gained investor confidence partly due to the congressional passage of an alternative fuels tax credit through the Biden administration bent towards renewable energy. Furthermore, alternative energy has been a major trend on Wallstreet, pushing EV and clean energy stocks into new, unseen territories. However, analysts price targets and ratings do hold some weight for the bears as the general consensus of FCEL stock is a Hold. This article will breakdown everything you need to know regarding FuelCells stock forecast in 2022 and beyond.
Table of contents
What are analysts forecasting for FCEL stock in 2022?
Firstly, the general consensus from analysts on the stock is relatively conservative with an average 12 month price target of $9.25. Among four notable Wallstreet analysts, three have listed hold ratings and one sell rating, these include:
- B. Riley 6/11/2021 – Analyst Ryan Pfingst lowered the firms price target to $10 a share, representing a slight upside from the current trading price.
- Canaccord 6/11/2021 – Analyst Jed Dorsheimer maintained their Hold rating on the stock with a price target of $9 a share.
- Wells Fargo 4/19/2021 – Analyst Praneeth Satish initiated coverage with an underweight rating and a price target of $9 a share. Satish noted some concerns regarding the companies current valuation despite FCEL’s growth opportunities like stationary power, distributed hydrogen, long-duration hydrogen storage and carbon capture.
- JPMorgan Chase & Co. 3/5/2021 – JP Morgan analysts dropped their 12-month price target from $10.00 to $9.00 a share. JP Morgan has rated the stock as underweight with a sell rating, having a medium impact on the share price.
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FuelCell’s financial review
FuelCell Energy had undertaken a large debt via a $200 million corporate loan with Orion Energy Partners in 2019. The loan was to enable future growth and funding of outstanding dividends/loans. However, as of December 2020 FCEL announced that it had fully paid the debt of $87 Million to Orion.
FuelCell generated $17.0 million in revenue in the fourth quarter of 2020, a 54% increase YOY. Additionally, revenues for the annual year of 2020 increased to $70.9 million, “primarily attributable to expanded Generation and Advanced Technologies activities.”
However, in the first recent quarter of 2021 the company missed analysts expectations with revenue of $14.9 million, a 9% decline YOY. This declined further in Q2 of 2021, with reported revenues of $13.9 Million. The company has attributed the slow revenue performance due to impacts on service and license agreements and temporary shut downs of project plants.
“We are firmly committed to achieving revenue growth by bringing projects online this year and positioning our portfolio to meet the significant market opportunities that our proprietary technology solutions are well positioned to solve”said Mr. Jason Few, President and CEO.
Revenue forecasts for FuelCell in 2021 and beyond
Looking forward, analysts expect revenue growth to improve with the average revenue forecast for 2021 at $73.82 Million. Furthermore, analysts predict revenue to reach $119 Million in 2022. The catalysts for the strong revenue forecasts include the company “addressing the promising market opportunities in the global energy transition.”
The pursuit of this market includes developments in technology to distribute hydrogen, develop long-duration hydrogen energy storage/power generation and carbon capture (process of capturing carbon dioxide to avoid it entering the atmosphere during power generation).
We remind our viewers that this article is not financial advice but rather investment commentary from extensive research.
In conclusion, the 12 month forecasts from analysts remain conservative with a general consensus to Hold. However, we can see analysts are confident revenue is likely to improve as we move through 2021. We will see over the next quarter if FuelCell gain regain the momentum we saw in February this year.
Written by Zac Lorschy at Youth Investment Group.
Edited by Tyger Fitzpatrick at Youth Investment Group.
The information above is not financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
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