What Happened?
Shares of carbonate fuel cell technology developer FuelCell Energy (NASDAQ:FCEL) jumped 18.4% in the morning session after the company reported mixed second-quarter results that featured a significant earnings beat, overshadowing a miss on revenue.
The fuel cell power plant maker posted revenue of $46.74 million, an impressive increase of 97.3% from the same period last year, but this fell short of Wall Street's expectation of $49.58 million. However, investors focused on the bottom line, where the company's adjusted loss of $0.95 per share was substantially better than the average analyst estimate of a $1.63 per share loss. The positive sentiment was further supported by a 4% year-over-year increase in the company's backlog to $1.24 billion. The much smaller-than-anticipated loss appeared to outweigh the revenue shortfall, fueling strong investor optimism.
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What Is The Market Telling Us
FuelCell Energy’s shares are extremely volatile and have had 83 moves greater than 5% over the last year. But moves this big are rare even for FuelCell Energy and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock dropped 5.5% on the news that the major indices continued to retreat amid profit-taking and renewed concerns about tariffs. Investors reacted to a federal court ruling that most of President Trump's global tariffs were illegal, raising uncertainty over trade policy and the fiscal impact of potential refunds. Rising Treasury yields added to the pressure, with the 10-year climbing above 4.2% and the 30-year nearing 5%, intensifying worries about stretched equity valuations. September's historically weak track record for stocks further dampened sentiment, leaving traders cautious ahead of the jobs report later in the week and the Federal Reserve's upcoming rate decision.
FuelCell Energy is down 50.5% since the beginning of the year, and at $5.13 per share, it is trading 67.4% below its 52-week high of $15.76 from September 2024. Investors who bought $1,000 worth of FuelCell Energy’s shares 5 years ago would now be looking at an investment worth $65.02.
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