FuelCell Energy (FCEL): Should You Buy, Sell, or Hold After Q3 Results?

FuelCell Energy’s Remarkable Stock Performance

FuelCell Energy has experienced a significant upswing recently, with its share price climbing 98.6% over the past half-year to reach $8.62. This impressive rally has prompted many investors to reconsider their strategies.

Is FCEL still a smart investment, or is its momentum simply driven by investor excitement?

What Makes Us Optimistic About FCEL?

Established in 1969, FuelCell Energy (NASDAQ: FCEL) stands out as a pioneer in the development and production of carbonate fuel cell systems for stationary power applications.

1. Expanding Backlog Secures Future Revenue

Examining a company's backlog offers valuable insight into its future earnings potential. This figure represents the total value of pending orders yet to be fulfilled, providing a glimpse into FuelCell Energy’s upcoming revenue streams.

In the most recent quarter, FuelCell Energy reported a backlog of $1.19 billion. Over the past two years, this backlog has grown at an average annual rate of 13.3%. Such growth highlights a strong sales pipeline, as the company continues to receive more orders than it can deliver. It also indicates that customers are making long-term commitments, which boosts the predictability of FuelCell Energy’s business.

2. Improving Earnings Per Share

Tracking changes in earnings per share (EPS) over time reveals whether a company’s growth is translating into profitability.

While FuelCell Energy’s annual earnings remain negative, the company has managed to narrow its losses, achieving an average EPS improvement of 8.2% per year over the last five years. The upcoming quarters will be pivotal in determining whether FuelCell Energy can sustain this progress and reach profitability.

3. Rising Free Cash Flow Margin Strengthens Financials

Free cash flow is a crucial metric that reflects a company’s ability to generate cash after covering all operating and capital expenses. Unlike other financial figures, it’s difficult to manipulate, making it a reliable indicator of financial health.

FuelCell Energy’s free cash flow margin has increased by 19.4 percentage points over the past five years. Although the trailing 12-month margin remains at negative 91%, continued improvement could pave the way for long-term cash profitability.

Our Verdict

These factors contribute to our view that FuelCell Energy is a strong company. With its recent surge, the stock is priced at $8.62 per share and carries a forward price-to-sales ratio of 1.7. Wondering if now is the right time to invest?

Top Stocks for Every Market Environment

Building a portfolio based on outdated trends can be risky, especially as the concentration in a few popular stocks increases.

Discover the Next Generation of Growth Stocks

The companies driving the next wave of substantial growth are featured in our Top 5 Growth Stocks for this month. This curated selection of High Quality stocks has delivered a remarkable 244% return over the past five years (as of June 30, 2025).

Our list includes well-known names like Nvidia, which soared by 1,326% between June 2020 and June 2025, as well as lesser-known companies such as Exlservice, which achieved a 354% five-year return. Start your search for the next standout stock with StockStory today.