FuelCell Energy (FCEL, Financial) is growing at a good pace. There are several key aspects on which FuelCell is now working on. Moreover, its partnership with a key power producer is expected and the addition of a new utility customer will allow it to improve its financial performance further. Let's take a closer look at FuelCell's performance and see why it can be a good buy going forward.
On track to improve
FuelCell is mainly concerned about improving its sales mix. The improvement in the sales will trigger its growth momentum. In addition, FuelCell is also working on reducing material costs to achieve better margins and manufacturing efficiencies. These improvement in the sales mix and margins affirms the improvements under the FuelCell camp in 2015.
Besides this, FuelCell is also engaged in deepening its relationship with NRG Energy. This step by FuelCell is a strategic initiative to strengthen its market existence. With this partnership, the company is seeing good validation in its products, service and business models as it is working closely with NRG Energy on number of projects.
All these strategic initiatives undertaken by FuelCell is expected to enhance the overall affordability and competitiveness of Ultra-clean solutions and service. These opportunities will allow FuelCell to offer its services to some of the high value projects in the key markets.
Moving ahead, under its strategic initiatives, FuelCell is expanding its North American facility in Torrington. This can be a smart move by the company as it is expected to further reduce its costs which will again help it to position itself for the future expected growth. This expansion will also help FuelCell to achieve better operating flexibility.
Strategic initiatives to drive growth
FuelCell has also come up with Carbon Capture Technology which is also growing rapidly. FuelCell is seeing good market opportunities with this technology and thinks that it can be a good contributor to its growth story. The company is seeing a strong private sector support for this technology as it has recently seen about 200 companies getting into this technology for the environmental protection Agency’s clean power plant.
It has good expectations with its advanced technologies as they are showing positive signs. Also, the increasing government funding to the private sectors has attracted their interest in investing in these technologies. The company in fact is seeing positive signals from this. This will also accelerate commercialization which will also attract the investors leading to improvement in the market share of FuelCell in the future.
Conclusion
Now moving to the fundamentals, the stock is showing tremendous growth trends and with a Forward P/E of 126.00 it is exhibiting strong growth in the earnings in the near term. Even in the long term, the stock can be a good long term holding as its earnings are growing at a CAGR of 40.00% which is more than the industry average of 26.39%. All these facts and statistics indicates that FuelCell is a good pick as of now and the investors should definitely give a thought for it.
