Update (1:22 p.m.): Updated with Monday trading information.
NEW YORK (TheStreet) -- FuelCell Energy (FCEL - Get Report) rose Monday morning as peer company Plug Power (PLUG) updated investors on its business in a conference call at 10 a.m. ET. But the stock then fell alongside Plug Power after the call.
Plug Power signed a non-binding memorandum of understanding with Hyundai Hysco for a joint venture partnership to sell hydrogen fuel cells in Asia. Details of the joint venture must be finalized by July 31 under the terms of this MOU. The company also plans to close $150 million in 2014 bookings; it has booked nearly $80 million year to date.
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Separately, 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 several weaknesses, 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. The company's weaknesses can be seen in multiple areas, such as its weak operating cash flow and poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$5.07 million or 116.42% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 7.35%. Despite the low profit margin, it has increased significantly 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 significantly underperformed against the S&P 500 and did not exceed that of the Electrical Equipment industry. 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.
- FCEL's debt-to-equity ratio of 0.66 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.40 is sturdy.
- You can view the full analysis from the report here: FCEL Ratings Report