Fuel Cell Energy (NASDAQ: FCEL) has confirmed that it will release its earnings today, December 29, 2021, for the fourth quarter ended October 2021, before the market open.
What to look for
The fourth-quarter results are expected to show the increased adoption of fuel cell tech and proper projects execution. In addition, the company and ExxonMobil entered an agreement to extend their fuel cell tech collaboration by six months during the quarter. This agreement allows the company to advance its work on carbon capture from industrial plants and power generation.
Earnings: Stockearning’s estimated EPS for the fourth quarter of 2021 is expected to be $0.02 per share. In the last quarter, the company delivered an earnings surprise of 20%, with an EPS loss of $0.04, beating estimates of a loss of $0.05 per share. Historical EPS Performance shows that the company has in the past 12 quarters beat estimates thrice, 25%, and missed eight times (66%).
Revenue: The company anticipates revenue of $20.34 million in Q4 2021, representing a YoY growth of 19.7%. In the third quarter, the company had revenue of $26.8 million relative to $18.7 million in Q3 2020.
Stock movement: FCEL shares have gained 12.1% since the last earnings release. Interestingly, FCEL shares have been DOWN 30 times out of the past 47 quarters. So, the historical price reaction suggests a 63% probability of the share price going DOWN once FCEL reports its fiscal Q4 earnings. According to the Stockearning algorithm, the predicted first-day move is 8%, while the predicted move on the seventh day is 12%.
What analysts are saying
B. Riley analyst Christopher Souther lowered his price target for FCEL from $10 to $8 and maintained a “hold” rating on the stock after “strong” Q3 results. Souther likes the progress the company has made on its portfolio strategy moves, balance sheet, and potential of its next-generation technology. However, the analyst remains on the sidelines because of the stock's "premium" valuation and marketing for solid oxide fuel cell products and carbon capture.
Canncord analyst Jed Dorsheimer lowered his price target on the stock from $13.5 to $9 but maintained a “Hold” rating on FuelCell shares. Dorsheimer said that the price target change is a reflection of the contraction in the H2 segment and Q2 results that missed revenue estimates.
Also, Wells Fargo analyst Praneeth Satish commenced coverage in the stock with a “Sell” rating and a price target of $9. The company is part of the growing hydrogen economy, a sector in its early innings and anticipated to boast massive growth in the coming years. Satish laid down the bullish and bearish scenarios for FCEL. The analyst stated that although FuelCell will benefit in the future from new solid oxide fuel cell products commercialization and carbon prospects, the firm struggles to see a potential scenario where FuelCell will grow into its valuation.
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