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NEW YORK (TheStreet) -- Shares of Ballard Power Systems (BLDP) were gaining 10.8% to $2.67 Monday after the fuel cell company announced two new Technology Solutions contracts.

The fuel cell maker signed a Non-Automotive Technology Solutions contract with Ardica Technologies, and an Automotive Technology Solutions contract with an unnamed "global automotive OEM." Under both contracts Ballard will use its expertise in proton exchange membrane fuel cell technology to "advance customer programs through development stage."

The contract with Ardica includes the next phase of an ongoing program to develop a wearable fuel cell power system for soldiers. The new work phase will focus on reducing costs and developing additional manufacturing capabilities as the Ardica system gets closer to the prototype stage.

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The goal of the fuel cell power system is to provide similar or better performance than current wearable lithium-ion batteries while decreasing weight and volume by more than 50% for 72-hour missions.

Ballard's contract with its new global automotive OEM customer involves work that's focused on fundamental fuel cell technology development.

The fuel cell maker currently has contracts with Volkswagen (VLKAY)  and two other unnamed global automotive OEMS.

TheStreet Ratings team rates BALLARD POWER SYSTEMS INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:

"We rate BALLARD POWER SYSTEMS INC (BLDP) 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. Among the areas we feel are negative, one of the most important has been poor profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The gross profit margin for BALLARD POWER SYSTEMS INC is currently lower than what is desirable, coming in at 32.63%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -11.75% is significantly below that of 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, BALLARD POWER SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
  • In its most recent trading session, BLDP has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Turning our attention to the future direction of the stock, we do not believe this stock offers ample reward opportunity to compensate for the risks, despite the fact that it rose over the past year.
  • BALLARD POWER SYSTEMS INC reported significant earnings per share improvement 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 two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, BALLARD POWER SYSTEMS INC continued to lose money by earning -$0.21 versus -$0.47 in the prior year. This year, the market expects an improvement in earnings (-$0.12 versus -$0.21).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Electrical Equipment industry. The net income increased by 46.3% when compared to the same quarter one year prior, rising from -$4.51 million to -$2.42 million.
  • You can view the full analysis from the report here: BLDP Ratings Report