NEW YORK (TheStreet) -- FuelCell Energy Inc. (FCEL - Get Report) stock was sharply lower Wednesday, down 14% to $2.50.
The decline comes as the country's largest publicly traded fuel cell manufacturer continues to be tethered to the performance of Plug Power (PLUG - Get Report) shares. FuelCell stock jumped 20% yesterday after Plug Power was up nearly 40%. Today, however, Plug is down over 14% and FuelCell has followed suit.
Power Plug's performance this year has been the litmus test for the entire sector and its shares have been extremely volatile over the past few weeks.
TheStreet Ratings team rates FUELCELL ENERGY INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate FUELCELL ENERGY INC (FCEL) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. Among the areas we feel are negative, one of the most important has been poor profit margins."
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Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 4.95%. Regardless of FCEL's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, FCEL's net profit margin of -23.86% significantly underperformed when compared to the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, FUELCELL ENERGY INC's return on equity significantly trails that of both the industry average and the S&P 500.
- The company, on the basis of net income growth from the same quarter one year ago, has underperformed when compared to that of the S&P 500 and the Electrical Equipment industry average. The net income increased by 9.2% when compared to the same quarter one year prior, going from -$11.68 million to -$10.60 million.
- Investors have driven up the company's shares by 141.94% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the future course of this stock, we feel that the risks involved in investing in FCEL do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- FUELCELL ENERGY INC has improved earnings per share by 14.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, FUELCELL ENERGY INC continued to lose money by earning -$0.20 versus -$0.24 in the prior year. This year, the market expects an improvement in earnings (-$0.12 versus -$0.20).
- You can view the full analysis from the report here: FCEL Ratings Report