What happened
Shares of fuel cell leader Plug Power (PLUG 0.66%) inched higher Thursday afternoon, rising 2.2% through 2:22 p.m. ET on what was actually a pretty slow news day for fuel cell companies.
In fact, scanning the news feeds, it seems the only real news is that Plug rival FuelCell Energy (FCEL 3.03%) confirmed yesterday that as soon as the Christmas holidays are past -- before market open on Dec. 29 -- it will be reporting its fiscal fourth-quarter 2021 earnings.
Image source: Getty Images.
So what
Why might investors think this is a good reason to snap up Plug shares before the report? Well, consider the following:
According to analyst estimates, Q4 is going to be a pretty good one for FuelCell Energy. Although the company is expected to lose money for the quarter, its projected loss of $0.04 per share -- if correct -- would represent less than half the losses FuelCell incurred a year ago. Moreover, analysts are forecasting 29% growth in quarterly sales for FuelCell.
Now what
On the one hand, if FuelCell proves out those predictions of explosive demand for fuel cells, it might lend investors greater confidence that Plug will be able to progress toward its own sales goals, like making $3 billion in sales by 2025.
At the same time, the fact that Wall Street is projecting a quarterly loss for FuelCell opens up the possibility that the company might earn a profit instead -- an earnings surprise that could bleed over to other fuel cell stocks like Plug and send them rocketing. Worst case, FuelCell might lose money for the quarter, but since no one was expecting them to earn a profit, even that probably won't be interpreted as bad news.
In short, Plug investors may be anticipating a "heads, fuel cell stocks win; tails, fuel cell stocks don't lose" scenario next week. Tune back in on Wednesday to see if that's how it plays out.
