FuelCell Energy Lags Industry in a Month: How to Play the Stock?

Core Insights - The company is undergoing a global restructuring aimed at enhancing its operations and focusing on core technologies related to distributed power generation, grid resiliency, and data center growth, which is expected to strengthen its position by 2025 [1][5]. Financial Performance - FuelCell Energy (FCEL) shares have seen an 11.5% decline over the past month, which is greater than the 7% decline in its industry [3]. - The fiscal fourth quarter 2024 results showed earnings per share lower than estimates, indicating potential challenges ahead [3]. - As of October 31, 2024, the company's backlog increased by nearly 13.1% year-over-year to $1.16 billion, up from$1.03 billion a year earlier, primarily due to the GGE Agreement [6]. Earnings Estimates - The Zacks Consensus Estimate for FCEL's fiscal 2025 earnings per share indicates a year-over-year growth of 29.44%, while revenue is expected to grow by 61.66% [18]. - Current earnings estimates for the upcoming quarters show a projected EPS of -1.70 for Q1 2025 and -5.44 for the current year [8]. Debt and Valuation - The company maintains a lower debt level compared to industry peers, with a debt to capital ratio of 16.86%, significantly lower than the industry average of 61.17% [10]. - FCEL is currently trading at a forward 12-month P/E ratio of -1.81, contrasting with the industry average of 23.44 [20]. Market Position and Future Outlook - The company is expected to benefit from the increasing acceptance of fuel cell technology and growing concerns about emissions, as indicated by the rising backlog [13]. - Through restructuring, the company aims to reduce operating costs by nearly 15% year-over-year in fiscal 2025 [16].