Up 24% Over The Last Month, What’s Next For FuelCell Energy?

FuelCell Energy stock, a company that designs, manufactures, and operates fuel cell power plants, rallied by almost 12% over the last week (five trading days). The stock also remains up by close to 24% over the past month (about 21 trading days), compared to the S&P 500, which has returned about 2%. So what’s driving the recent gains? Firstly, investors have turned their attention back to renewable energy stocks following the Russian invasion of Ukraine, which has caused a surge in oil and gas prices. Brent crude prices are up by almost 35% year-to-date, trading at over $105 per barrel, while gas prices in Europe hit all-time highs earlier this month, amid uncertainties about supplies. This could make energy importing countries more serious about accelerating their shift toward renewables, including hydrogen and fuel cells, as a means of improving energy independence. Separately, FuelCell Energy recently published its Q1 FY’22 earnings, with revenue growing by a stronger than expected 113% year-over-year to $31.8 million. Now although the company’s net loss for the quarter was wider than expected, expanding the top line is likely the key priority for investors at this phase.

Given that FCEL stock is up 24% over the last month, will it continue its upward trajectory, or is a decline imminent? Going by historical performance, there is a higher chance of a decline in FCEL stock over the next month. Out of 308 instances in the last ten years that FCEL stock saw a twenty-one-day rise of 24% or more, 141 of them resulted in FCEL stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 141 out of 308, or a 46% chance of a rise in FCEL stock over the coming month, implying that FCEL stock may not be a good bet in the near term. See our analysis on FuelCell Energy Stock Chance of A Rise for more details.

While FCEL stock may see lower levels in the near term, it is helpful to see how its peers stack up. Check out FuelCell Energy Peers to see how FE stock compares against peers on metrics that matter. You can find more useful comparisons on Peer Comparisons.

Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last ten years’ data

• After moving 12% or more over a five-day period, the stock rose in the next five days on 40% of the occasions.
• After moving 10% or more over a ten-day period, the stock rose in the next ten days on 39% of the occasions.
• After moving 24% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 46% of the occasions.

This pattern suggests that there is only a small chance of a rise in FCEL stock in the near term.

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