FuelCell Energy: Balancing Restructuring Progress with Profitability Challenges – Hold Recommendation

In a report released today, Jeff Osborne from TD Cowen maintained a Hold rating on Fuelcell Energy, with a price target of $7.00.

Jeff Osborne has given his Hold rating due to a combination of factors influencing FuelCell Energy’s current financial and operational performance. On the positive side, the company is beginning to see the benefits of its restructuring efforts, and it is making progress in commercial agreements, particularly in South Korea with CGN and Inuverse. Additionally, FuelCell Energy is well-positioned to take advantage of tax credits related to fuel cells and carbon capture, which could bolster future growth.
However, there are notable challenges that temper the optimism. The company’s gross margin and EBITDA for F3Q25 fell short of consensus expectations, indicating ongoing profitability issues. Moreover, the company experienced a significant free cash flow burn, and its backlog has declined, raising concerns about future revenue streams. These mixed results suggest that while there is potential for improvement, there are also significant risks, leading to the Hold recommendation.