Should You Invest in FCEL Stock Amid Rising Data Center Demand?
TL/DR –
FuelCell Energy reported better-than-expected fiscal fourth-quarter earnings, leading to a 22% rise in its stock. The company, which is focused on data center operations, expects to increase production in line with growing AI demand, aiming for positive adjusted EBITDA at an annualized production rate of 100 megawatts. However, while its stock has gained 37.17% over the past six months, analysts maintain a mixed view on the company’s bottom-line trajectory and recommend a cautious approach.
FuelCell Energy Stock Surges Following Q4 Earnings Announcement
FuelCell Energy (FCEL), a renowned clean energy company, experienced a significant 22% intraday stock increase on December 18, following an impressive fourth-quarter earnings report that exceeded market expectations.
Data Centers Drive Sales
Key to FuelCell’s robust performance is the burgeoning demand from data centers, known for their high energy requirements. The company has strategically concentrated its sales and marketing initiatives on data center operations, diligently communicating to operators and infrastructure finance providers that their high-energy applications can be reliably powered by FuelCell’s technology.
With the acceleration of AI demand, FuelCell anticipates ramping up production significantly, thereby establishing a trajectory towards positive EBITDA once an annualized production rate of 100 megawatts is achieved.
About FuelCell Energy
Headquartered in Danbury, Connecticut, FuelCell Energy is an industry leader in the production of stationary fuel cell platforms for sustainable and efficient power generation. The company is known for designing, manufacturing, installing, operating, and servicing megawatt-scale systems powered by advanced molten carbonate technology. These systems generate ultra-clean electricity with minimal emissions.
FuelCell’s versatile platforms allow for carbon capture and sequestration, hydrogen and water production, and long-duration energy storage solutions tailored for utilities, industries, and municipalities. The company, founded in 1969, boasts a market capitalization of $269.34 million and continues to drive reliable fuel cell innovations to address global clean energy needs and environmental targets.
FuelCell’s Stock Performance
Despite broader market volatility, FuelCell’s stock has experienced its own roller-coaster ride. Over the past year, the stock fell by 10.6%, but saw a robust recovery of 37.17% over the past six months. At its peak, the stock reached a 52-week high of $13.98 in January, but has since fallen by 40%. Yet, from its 52-week low of $3.58 in May, the stock has risen by an impressive 133%.
Recent Financial Performance
On December 18, FuelCell revealed its financial performance for the fourth quarter and fiscal year 2025, which ended on October 31. Quarterly revenue rose by 12% year-over-year (YOY) to $55.02 million, exceeding Wall Street analysts’ expectations of $43.96 million.
Driving the top-line growth was an 18% increase in product revenue from the prior year, amounting to $30.03 million. This boost was largely due to a $30 million extended service contract with Gyeonggi Green Energy Co., Ltd. (GGE) for the supply and activation of 10 fuel cell units at GGE’s 58.8 MW power facility in Hwaseong-si, South Korea.
FuelCell’s cost efficiency has also seen marked improvement. The company reported a decrease in bottom-line losses due to the streamlining of its product lineup, increased efficiency, and the incorporation of absorption chilling to manage thermal loads. The Q4 adjusted EBITDA loss stood at $17.68 million, a 30% YOY reduction. The adjusted net loss per share for Q4 was $0.83, reflecting a 55% reduction from the prior-year period’s per-share loss of $1.85, and below the $1.03 per-share loss projected by market analysts.
Market Analysts’ Mixed Opinions
While FuelCell’s financial performance has shown positive signs, market analysts’ opinions about the company’s bottom-line trajectory remain mixed. For the current fiscal year (fiscal 2026), analysts anticipate the company’s loss per share to reduce by 29.3% YOY to $3.12, but expect a deepening of losses by 42.6% to $4.45 per share in the following fiscal year.
Despite the mixed views, analysts from Canaccord Genuity recently reiterated their “Hold” rating and $12 price target on FuelCell’s stock, noting that the company must demonstrate tangible outcomes from its data center initiatives. Likewise, TD Cowen analysts reaffirmed their “Hold” rating but raised the price target from $7 to $9, indicating a potential shift in sentiment in the near future.
Final Thoughts
While FuelCell’s operations are buoyed by the strong demand from data centers, the company continues to report losses. Accordingly, interested investors may consider observing the stock before making any investment decisions.
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