Cautious Outlook on Fuelcell Energy: Sell Rating Amid Revenue Shortfalls and Uncertain Growth Prospects

Analyst Praneeth Satish from Wells Fargo maintained a Sell rating on Fuelcell Energy (FCEL – Research Report) and keeping the price target at $5.00.

Praneeth Satish’s rating is based on several key factors impacting Fuelcell Energy’s financial performance. The company’s first quarter of fiscal year 2025 results fell short of expectations, with revenue and adjusted EBITDA missing consensus estimates significantly. This underperformance is primarily attributed to lower-than-anticipated product revenue and continued challenges in achieving positive EBITDA margins.
Furthermore, while there are potential opportunities for growth through partnerships, such as the Diversified/TESIAC deal, these prospects are uncertain and difficult to finalize. The analyst has also revised down the EBITDA estimates for fiscal years 2025 and 2026, reflecting a more cautious outlook on the company’s commercialization pace and margin improvements. Despite some cost-cutting measures beginning to take effect, the overall financial outlook remains challenging, leading to the Sell rating.

In another report released on March 11, J.P. Morgan also maintained a Sell rating on the stock with a $6.00 price target.