Why FuelCell (FCEL) Stock Is Up Today

Tickers in this article: FCEL

NEW YORK (TheStreet) -- FuelCell  stock is gaining Tuesday after the company announced a collaboration with POSCO Energy  to meet increasing global demand for fuel cell power plants. The companies will partner to deliver 5.6 megawatts to meet rising demand in Asia. FuelCell and POSCO Energy said they would also work together to win additional multinational customer contracts.

"With growing global adoption of Direct FuelCell®power plants, trends to larger-sized fuel cell parks, and cross-territorial interest from multi-national customers, FuelCell Energy and POSCO Energycan support global customers in each other's local market to ensure consistency of communication, quality and execution," the companies said in a statement. 

FuelCell shares had spiked 5% to $2.10 in morning trading. 

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Separately, TheStreet Ratings team rates FUELCELL ENERGY INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:

"We rate FUELCELL ENERGY INC (FCEL) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Net operating cash flow has significantly decreased to -$5.07 million or 116.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 7.35%. Despite the low profit margin, it has increased significantly from the same period last year. Despite the mixed results of the gross profit margin, FCEL's net profit margin of -23.86% significantly underperformed when compared to the industry average.
  • The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, FUELCELL ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • FCEL's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.40 is sturdy.
  • The net income growth from the same quarter one year ago has exceeded that of the Electrical Equipment industry average, but is less than that of the S&P 500. The net income increased by 9.2% when compared to the same quarter one year prior, going from -$11.68 million to -$10.60 million.