What Happened?
Shares of carbonate fuel cell technology developer FuelCell Energy (NASDAQ: FCEL) jumped 27.8% in the afternoon session after the company reported impressive first quarter 2025 (fiscal Q2) results which blew past analysts' sales estimates.
Most of that strength came from product sales and service deals, especially those tied to replacing modules under a long-term agreement. Its backlog kept growing too, up almost 19%, which suggests customer demand is still healthy.
Still, the good news on the sales side didn't quite make its way down the income statement. Margins remained in the red, though operating losses narrowed a bit. The pressure on margins ended up pulling down both EBITDA and EPS, which missed analysts' estimates. To get things back on track, the company's cutting costs, trimming its workforce by 22%, and putting more focus on its carbonate tech that powers distributed energy projects. So while sales momentum looks solid, the quarter showed that getting to profitability remained an uphill climb.
On the leadership front, FuelCell also brought on Mike Hill as its new Chief Commercial Officer, hoping his experience can help push things forward.
The shares closed the day at $6.47, up 24.4% from previous close.
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What The Market Is Telling Us
FuelCell Energy’s shares are extremely volatile and have had 91 moves greater than 5% over the last year. But moves this big are rare even for FuelCell Energy and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 5 months ago when the stock gained 17.8% on the news that the Biden administration announced new rules clarifying that some nuclear power plants can secure tax credits for producing clean hydrogen if the credits help keep reactors running.
This announcement means more funding opportunities for hydrogen producers despite some opposition from environmental groups regarding the use of nuclear to produce hydrogen. The update also provides more certainty for investors and related companies within the clean energy space.
FuelCell Energy is down 36.5% since the beginning of the year, and at $6.58 per share, it is trading 77.6% below its 52-week high of $29.37 from June 2024. Investors who bought $1,000 worth of FuelCell Energy’s shares 5 years ago would now be looking at an investment worth $81.08.
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