Shares of FuelCell Energy (NASDAQ:FCEL) 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.
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.
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.
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.