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FuelCell Energy Shares Plunge 15.4% as Sell-Off Continues

By Travis Hoium - Updated Jan 27, 2020 at 4:35PM

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There's no recovery today for the company's investors.

What happened 

Shares of FuelCell Energy (FCEL 0.80%) fell as much as 17.6% on Monday, continuing a drop that has the stock down nearly 50% in under a week. Shares closed the day down 15.4% and show absolutely no sign of recovery right now. 

So what

The drop today is a continuation of last week's drop following a nearly 30% decline after fiscal fourth-quarter earnings came out. Revenue and earnings both fell short of expectations, and after the stock jumped over 600% in the last few months, the market was expecting better results. 

Fuel cell plant on a cloudy day.

A FuelCell Energy plant. Image source: FuelCell Energy.

Today's drop was really an amplification of the broader market sell-off that took place. The Dow Jones Industrial Average and S&P 500 both fell 1.6% today, and a highly volatile stock like FuelCell Energy can often take a bigger hit than the market overall. 

Now what

For investors, there's little reason to buy today's drop. Earnings results weren't anything to be excited about, and if the market overall takes a dive, it won't be good for FuelCell Energy's business or its stock. 

What I would like to see is a fundamental improvement in FuelCell Energy's business, which might start to take shape in 2020. The company has touted improved technology and a large backlog of over $1 billion in potential projects. But as the stock approaches the dreaded $1 price, I would be wary of FuelCell Energy. Look for management to prove the company can make a profit before betting on another big pop in shares.

In short, there are much better stocks to bet on in 2020

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