Did FuelCell Energy Inc’s (NASDAQ:FCEL) Recent Earnings Growth Beat The Trend?
For long term investors, improvement in profitability and outperformance against the industry can be important characteristics in a stock. In this article, I will take a look at FuelCell Energy Inc’s (NASDAQ:FCEL) track record on a high level, to give you some insight into how the company has been performing against its historical trend and its industry peers. Check out our latest analysis for FuelCell Energy
Commentary On FCEL’s Past Performance
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to analyze various companies in a uniform manner using the latest information. For FuelCell Energy, its most recent trailing-twelve-month earnings is -US$51.06M, which, in comparison to the previous year’s figure, has become less negative. Since these figures are somewhat short-term thinking, I’ve determined an annualized five-year value for FCEL’s net income, which stands at -US$45.51M. This means that, FuelCell Energy has historically performed better than recently, though it seems like earnings are now heading back in the right direction again.
We can further analyze FuelCell Energy’s loss by looking at what the industry has been experiencing over the past few years. Each year, for the last five years FuelCell Energy’s revenue growth has been somewhat muted, with an annual growth rate of -1.71%, on average. The company’s inability to breakeven has been aided by the relatively flat top-line in the past. Viewing growth from a sector-level, the US electrical industry has been growing, albeit, at a unexciting single-digit rate of 4.94% in the previous twelve months, and a substantial 10.95% over the past five years. This means that even though FuelCell Energy is presently running a loss, any recent headwind the industry is experiencing, the impact on FuelCell Energy has been softer relative to its peers.
What does this mean?
FuelCell Energy’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. With companies that are currently loss-making, it is always difficult to forecast what will occur going forward, and when. The most insightful step is to assess company-specific issues FuelCell Energy may be facing and whether management guidance has dependably been met in the past. You should continue to research FuelCell Energy to get a more holistic view of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for FCEL’s future growth? Take a look at our free research report of analyst consensus for FCEL’s outlook.
2. Financial Health: Is FCEL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 January 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
