FuelCell Energy, Inc. (NASDAQ:FCEL) Just Reported, And Analysts Assigned A US$1.51 Price Target

Last week, you might have seen that FuelCell Energy, Inc. (NASDAQ:FCEL) released its quarterly result to the market. The early response was not positive, with shares down 8.9% to US$1.13 in the past week. Statutory results overall were mixed, with revenues coming in 35% lower than the analysts predicted. What's really surprising is that losses of US$0.05 per share were 36% smaller than what was predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for FuelCell Energy

Taking into account the latest results, the most recent consensus for FuelCell Energy from ten analysts is for revenues of US$108.3m in 2024. If met, it would imply a satisfactory 5.1% increase on its revenue over the past 12 months. Per-share losses are predicted to creep up to US$0.27. Before this latest report, the consensus had been expecting revenues of US$134.1m and US$0.30 per share in losses. We can see there's definitely been a change in sentiment in this update, with the analysts administering a meaningful downgrade to next year's revenue estimates, while at the same time reducing their loss estimates.

The consensus price target fell 11% to US$1.51, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic FuelCell Energy analyst has a price target of US$2.00 per share, while the most pessimistic values it at US$1.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. We would highlight that FuelCell Energy's revenue growth is expected to slow, with the forecast 6.9% annualised growth rate until the end of 2024 being well below the historical 19% p.a. growth over the last five years. Compare this to the 136 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 8.1% per year. Factoring in the forecast slowdown in growth, it looks like FuelCell Energy is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Sadly, they also downgraded their revenue forecasts, but the business is still expected to grow at roughly the same rate as the industry itself. Still, earnings per share are more important to value creation for shareholders. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple FuelCell Energy analysts - going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 3 warning signs for FuelCell Energy that you should be aware of.

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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.