FuelCell Energy FCEL has rallied sharply, with the stock up 194.9% year to date and recently trading at $21.56. The 6-12-month price target of $28 suggests room for upside, but the case is not straightforward.
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The issue is whether improving sentiment and growth optionality can outweigh persistent losses, weaker backlog and uncertain proposal conversion.
FCEL Has Upside But Not a Clean Case
FCEL’s $28 price target implies further appreciation from the recent share price. Earnings estimates have also moved higher, with the fiscal 2026 EPS estimate showing a 9.6% four-week improvement.
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That supports a more constructive near-term setup. Still, the stock remains rated Neutral for the long term because FuelCell Energy lacks dependable visibility into when proposals will become signed contracts and revenue.
FuelCell Energy Offers Visible Growth Angles
The bull case rests on large power demand from AI and data centers. FuelCell Energy’s second-quarter pipeline reached 4 GW, up 267% sequentially, with about 89% of proposals tied to data centers.
Its 12.5-MW FuelCell Energy Block is aimed at shortening time-to-power for AI and data center developers. Bloom Energy BE is also targeting data center power needs with fuel-cell systems, underscoring the broader investor focus on on-site, reliable power for digital infrastructure.
Korea is another near-term support. FuelCell Energy delivered $18 million of fuel cell products in the second quarter, in line with prior targets, and expects additional module activity to support second-half fiscal 2026 revenue.
Carbon capture adds a longer-term layer. Two carbon capture modules were en route to Rotterdam for ExxonMobil, giving FCEL another potential growth pathway beyond core distributed generation.
FCEL Profitability Is Still the Weak Link
The caution starts with profitability. In the second quarter of fiscal 2026, FuelCell Energy reported revenues of $35.6 million, a gross loss of $12.9 million and a net loss of $77.6 million.
Adjusted EBITDA was negative $17.1 million. While that improved from negative $19.3 million a year earlier, the company remains far from sustainable earnings.
Scale is critical. Management has indicated adjusted EBITDA positivity depends on reaching annual output of at least 100 MW, versus roughly 30 MW today. That makes production volume not just helpful, but central to the investment thesis.
FuelCell Energy Carries Funding Risk
FuelCell Energy had nearly $441 million in total cash, cash equivalents and restricted cash as of April 30, 2026, giving it liquidity to pursue growth.
However, expansion is expensive. The Torrington capacity expansion toward up to 500 MW of annualized production is expected to cost $200-$275 million over 24 months.
Funding risk remains part of the equation. The company issued $155.3 million of common stock, net of fees, in the first six months of fiscal 2026, showing that external capital can still affect shareholders.
Plug Power PLUG is another hydrogen and fuel-cell company whose business highlights the capital-intensive nature of clean-energy scaling. Plug describes its focus as hydrogen and fuel-cell solutions across applications including material handling and stationary power.
FCEL Rating Signals Cautious Optimism
The bottom line: FCEL may appeal to risk-tolerant investors looking for exposure to AI power demand, data center electrification and carbon capture optionality. Yet the stock still looks mixed rather than clearly attractive after its rally.
FCEL carries a Zacks Rank #2 (Buy), which points to improving estimate sentiment over the next one to three months. Its Style Scores are less supportive overall: Value Score of F, Momentum Score of D and VGM Score of D.
The Growth Score of B is the bright spot, consistent with the company’s pipeline and longer-term expansion potential. Taken together, the Rank and Style Scores suggest cautious optimism, not a clean buy case.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
