Fuelcell Energy’s Profitability Challenges Prompt Sell Rating Despite Revenue Growth Projections

Praneeth Satish, an analyst from Wells Fargo, maintained the Sell rating on Fuelcell Energy (FCEL – Research Report). The associated price target remains the same with $5.00.

Praneeth Satish has given his Sell rating due to a combination of factors reflecting Fuelcell Energy’s current financial outlook and strategic shifts. Despite raising revenue and gross profit estimates for the fiscal years 2025 and 2026, there remains a significant concern about the company’s path to profitability. The transition from solid oxide to carbonate fuel cell sales, while expected to increase revenue, also brings higher costs, which impacts the overall financial health of the company.
Furthermore, although there is an anticipated increase in service revenue and a planned reduction in operating expenses by approximately 30% compared to FY2024 levels, the adjusted EBITDA estimates for FY2025 and FY2026 remain negative. This indicates ongoing financial challenges, reinforcing the Sell rating as the company struggles to achieve a sustainable profit margin in the near term.