On Friday, B.Riley raised the price target on shares of FuelCell Energy (NASDAQ:FCEL) to $12.00 from the previous $1.50 while maintaining a Neutral rating. The revision reflects the company’s latest financial results and market performance.
FuelCell Energy reported fourth-quarter revenue and EBITDA of $49.3 million and negative $25.3 million, respectively, surpassing both B.Riley’s and the Street’s expectations, which were set at $39.3 million and negative $16.3 million for revenue and $39.6 million and negative $16.4 million for EBITDA.
The company’s year-over-year backlog increased from $1.03 billion to $1.16 billion at the end of the fourth quarter, primarily due to a significant agreement with Gyeonggi Green Energy (GGE). This increase is attributed to the allocation between product backlog and service backlog.
Looking forward, FuelCell Energy has issued capital expenditure and research & development spending guidance for fiscal year 2025, projecting $20 million to $25 million and $40 million to $45 million, respectively. These figures represent a decrease from the previous year’s spending of $47.7 million and $55.4 million, indicating the company’s strategic efforts to control its spend.
Last month, FuelCell Energy announced a global restructuring plan aimed at reducing operating costs by 15% in the fiscal year 2025. The plan is designed to realign the company’s resources to focus on its core technologies. Following these changes, FuelCell Energy concluded the quarter with a substantial cash position, holding $318.0 million in cash and equivalents, including $109.1 million in U.S. Treasury Securities.
The new price target of $12 per share takes into account the reverse stock split that FuelCell Energy effected on November 8, 2024. This adjustment was part of the company’s efforts to optimize its capital structure and improve the attractiveness of its stock to investors. The updated valuation by B.Riley signifies a notable increase in confidence in FuelCell Energy’s financial health and market position.
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