FuelCell Energy: Sell On Persistent Lack Of A Viable Business Model

Summary:

• FuelCell Energy reported mixed Q4/FY2024 results with a disappointing gross margin performance somewhat offset by positive cash flow from operations.
• Common shareholder dilution from open market sales continued unabatedly.
• Due to weak near-term business prospects, management has decided to reduce investments and lower operating expenses.
• While investors should continue to avoid the common shares, the company’s Series B Preferred Shares offer a juicy 13.6% dividend yield, for income-oriented investors.
• Considering the persistent lack of a viable business model and with dilution for common shareholders from open market sales likely to persist, I reiterate my “Sell” rating on FuelCell Energy’s common shares.

Note:

I have covered FuelCell Energy, Inc. or “FuelCell Energy” (NASDAQ:FCEL, OTCPK:FCELB) previously, so investors should consider this article an update to my earlier work on the company.

Earlier this month, FuelCell Energy reported mixed Q4/FY2024 results, with higher-than-expected

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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