FuelCell Energy (NASDAQ: FCEL) stock first rose to extreme popularity at the beginning of 2021. The FCEL stock rice reached heights of $29.44 in February before the stocks momentum fell through. With the stock now trading 50% lower YTD, investors are asking if now is the time to capitalise on FCEL stock? This article will breakdown everything investors should know about the FCEL stock forecast over the next 5 years.
Who is FuelCell Energy?
FuelCell Energy (NASDAQ:FCEL) aims to deliver clean and affordable fuel cell solutions for supply and storage of energy. The company has been operating since 1969 and first listed on the NASDAQ in 1992. In simple terms, FuelCell’s technology converts energy in hydrogen rich fuels into electricity and high-quality heat.
In comparison to solar and wind energy, FuelCell technology has additional benefits including a 24/7 energy output, a compact footprint and is cost effective.
B.Riley analyst sees major catalysts for FCEL stock beyond 2022
In June, Wallstreet analyst Christopher Souther lowered the firm’s price target on FuelCell Energy to $10 after the Q2 results. The analyst highlighted that the second quarter was below estimates as the company did not recognize any module exchanges.
Souther added that the firm still sees “major catalysts” around the commercialisation of carbon capture and the solid oxide platform through 2022 and beyond. The $10 valuation represents a 71% upside from the current FCEL stock price.
FCEL stock drops well below Wallstreet’s valuation
Following a dissapointing Q2 revenue miss, analysts such as Canaccord’s Jed Dorsheimer lowered their valuations based on updated multiples. However, the average valuation on FCEL stock remains at $9.25. With the FCEL stock price now trading in the $5 territory, the targets represent a 58% upside on average.
Although FCEL stock may lack the short term catalysts investors want to see, it is clear Wallstreet maintains a valuation priced well above the market price. In fact, Jed Dorsheimer’s price target is the lowest on Wallstreet yet suggests a 50% upside. The Cannacord analyst said his $9 target reflects the multiple contraction as the Q2 revenue miss effects the revenue outlook for 2021 according to TheFly.
FuelCell Revenue Forecast – what are the catalysts for the FCEL stock forecast?
Looking ahead, analysts expect revenue growth to slightly improve year-on-year. Across the board, the average revenue forecast for 2021 at $72.34 Million. At current, the revenue catalysts for the annual year look slim with little to no improvement compared to 2020.
Analysts predict revenue to reach $121.2 Million in 2022 which represents a strong improvement YOY of 67%. The catalysts for the strong 2022 revenue forecasts include the company “addressing the promising market opportunities in the global energy transition” alongside the commercialisation of carbon capture and the solid oxide platform outlined by analyst Christopher Souther.
Te company has highlighted its potential market opportunities in developments of technology to distribute hydrogen, develop long-duration hydrogen energy storage/power generation and carbon capture. Carbon capture is the process of capturing carbon dioxide to avoid it entering the atmosphere during power generation.
Is Short interest driving the FCEL stock price lower?
Firstly, over the past month the stock has been on steady decline, down 13.28%. The decline in investor sentiment over the past month is driving the stock into bearish territory. As of August 13, FCEL stock had a short float of 17.31% which is considered a bearish signal. Generally speaking, a short float below 10% suggests the stock has a bullish sentiment while over 10% indicates a higher level of pessimism towards the stock.
Over the past quarter, the percentage of short float has increased by 19%, suggesting short sellers are increasing adding pressure to the FCEL stock price.
The Bottom Line – FCEL stock forecast 2025
Overall, the valuations from Wallstreet analysts hold upside due to the steady downtrend of the FCEL stock price. In addition, we can see some analysts are confident revenue is likely to improve in 2022 with catalysts such as the commercialisation of carbon capture and the solid oxide platform. We will see over the next quarter if FuelCell gain regain the momentum we saw in February this year.
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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