NEW YORK (TheStreet) -- Shares of FuelCell Energy Inc (FCEL) continue to soar, up 7.43 to $2.17, in late morning trading today after the Danbury, CT-based company announced that the State of Connecticut extended a financial package through the Department of Economic and Community Development for its manufacturing expansion project last week.
The terms of the financial deal includes $20 million of low interest long-term loans as well as $10 million of tax credits with the forgiveness of 50% of the loan principal if certain job retention and job creation targets are reached.
The fuel cell power plant company is planing for a two stage expansion project to improve manufacturing and logistics efficiencies for global growth.
The existing manufacturing facility in Torrington, CT will be expanded in the first stage and production equipment will be added in its second stage.
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 multiple 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 deteriorating net income, poor profit margins and weak operating cash flow."
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 decreased by 24.3% when compared to the same quarter one year ago, dropping from -$5.61 million to -$6.98 million.
- The gross profit margin for FUELCELL ENERGY INC is currently extremely low, coming in at 11.77%. 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 -16.16% significantly underperformed when compared to the industry average.
- Net operating cash flow has decreased to -$15.92 million or 13.78% when compared to the same quarter last year. Despite a decrease in cash flow FUELCELL ENERGY INC is still fairing well by exceeding its industry average cash flow growth rate of -28.29%.
- 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.
- FCEL, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues fell by 19.6%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- You can view the full analysis from the report here: FCEL Ratings Report