It might be of some concern to shareholders to see the FuelCell Energy, Inc. (NASDAQ:FCEL) share price down 17% in the last month. But over three years the performance has been really wonderful. Indeed, the share price is up a whopping 990% in that time. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. Only time will tell if there is still too much optimism currently reflected in the share price. It really delights us to see such great share price performance for investors.
Since the long term performance has been good but there's been a recent pullback of 10%, let's check if the fundamentals match the share price.
Given that FuelCell Energy didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
FuelCell Energy's revenue trended up 15% each year over three years. That's pretty nice growth. Arguably the very strong share price gain of 122% a year is very generous when compared to the revenue growth. After a price rise like that many will have the business, and plenty of them will be wondering whether the price moved too high, too fast.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
FuelCell Energy is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. If you are thinking of buying or selling FuelCell Energy stock, you should check out this free report showing analyst consensus estimates for future profits.
A Different Perspective
While the broader market lost about 21% in the twelve months, FuelCell Energy shareholders did even worse, losing 51%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 13% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for FuelCell Energy you should be aware of.
We will like FuelCell Energy better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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