NEW YORK (TheStreet) -- FuelCell Energy (FCEL) - Get Report stock is soaring 19.63% to $6.36 on heavy trading volume on Friday after a new fuel cell facility proposal was approved by the Connecticut Siting Council.
The Danburgy, CT-based fuel cell company will manufacture the fuel cells for the facility, which will provide clean energy to about 60,000 Connecticut residents, the developer, Beacon Falls Energy Park, said in a statement.
"Today's draft approval by the Connecticut Siting Council completes a major milestone in the permitting process," the developer said in the statement. "Construction is anticipated to begin later in 2016 with the project fully operational at the end of 2019."
The energy facility will be the largest fuel cell facility in the world.
"We expect the total value to FuelCell Energy to be close to $500 million," Jeffrey Osborne, a Cowen & Co. analyst, said in a note, according to Bloomberg. "We see this project as a huge win for the company."
So far today, 1.52 million shares of FuelCell have traded, versus the company's 30-day average of about 645,000 shares.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate FUELCELL ENERGY INC as a Sell with a ratings score of D-. This is driven by a few notable 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 unimpressive growth in net income, poor profit margins and generally disappointing historical performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 88.5% when compared to the same quarter one year ago, falling from -$4.70 million to -$8.86 million.
- The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 6.11%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -17.22% is significantly below that of the industry average.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 73.12%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 50.00% compared to the year-earlier quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. 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.
- Despite the weak revenue results, FCEL has outperformed against the industry average of 21.5%. Since the same quarter one year prior, revenues slightly dropped by 5.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- You can view the full analysis from the report here: FCEL