Rating the Top 3 Fuel Cell Energy Stocks Following Q2 Earnings

Fuel cell energy stocks have been making headlines during the summer. The industry is likely to substantially benefit from the recently signed Inflation Reduction Act, which “includes support for hydrogen through a new tax credit that will award up to $3/kg for low carbon hydrogen.”

Investors seem to agree, with the NASDAQ Clean Edge Green Energy Index down less than 5% year-to-date (YTD). In comparison, the NASDAQ Composite Index is down almost 20% over the same period.

Fuel cell technology has been at the forefront of the green energy revolution for many years. According to the US Department of Energy, fuel cells use “the chemical energy of hydrogen or other fuels to cleanly and efficiently produce electricity. If hydrogen is the fuel, the only products are electricity, water, and heat.”

Meanwhile, recent research highlights, “The global fuel cell market size was valued at USD 4.1 billion in 2020 and is expected to grow at a compound annual growth rate (CAGR) of 23.2% from 2020 to 2028.” Therefore, Wall Street pays close attention to fuel cell energy stocks.

Most analysts agree fuel cell energy continues to play an important role in achieving net zero carbon emissions. As the related technology improves, this sector is likely to rebound stronger than ever. With that information, here are three fuel cell energy stocks to buy now.

FCEL FuelCell Energy $4.02
BLDP Ballard Power Systems $7.30
PLUG Plug Power $26.39

FuelCell Energy (FCEL)

Source: Bern James / Shutterstock.com

52-week range: $2.87 – $11.63

FuelCell Energy (NASDAQ:FCEL) manufactures, operates and services hydrogen fuel cell power plants worldwide. It operates the largest fuel cell park in the world, the Gyeonggi Green Energy Park in South Korea, as well as the largest park in North America in Bridgeport, CT.

In early June, FuelCell reported second-quarter financials. Revenue increased from $14 million to $16.4 million. Net diluted loss per share was 8 cents, compared to a loss per share of 6 cents the year before. Cash and equivalents totaled $467.8 million.

Recently, the company announced a collaboration with TuNur, a renewable energy developer based in Tunisia. The agreement seeks to develop and deliver FuelCell green energy solutions to Europe and North Africa. Tunisia has substantial solar power potential and a pipeline that extends to Italy, facilitating the delivery of green energy into Europe. Therefore, long-term FuelCell Energy investors will be paying close attention to how the deal may help the top line.

So far in the year, FCEL stock has fallen around 30% YTD. Shares are trading at 18.9 times sales. Wall Street’s 12-month median forecast stands at $5.

Ballard Power Systems (BLDP)

Source: Pavel Kapysh / Shutterstock.com

52-week range: $5.75 – $19.66

Ballard Power Systems (NASDAQ:BLDP) develops and manufactures proton exchange membrane fuel cell products for use in heavy-duty automobiles, portable power, materials and engineering.

In early August, Ballard posted Q2 earnings. Revenue was $20.9 million, down 16% year-over-year (YOY). Diluted loss per share was 19 cents, compared to 7 cents the prior year. Cash reserves were just over $1 billion.

Recently, the energy company showcased a hydrogen fuel cell-powered class 2 truck chassis. The demonstration is a product of a strategic partnership between Ballard and Linamar (OTCMKTS:LIMAF). The chassis utilizes Ballard’s eighth generation FCmove-HD+ fuel cell module, which is smaller, lighter and simpler than previous models.

BLDP stock has dropped more than 40% YTD. Shares are trading at 23.9 times sales. Lastly, the 12-month median forecast stands at $10.

Plug Power (PLUG)

Source: Alexander Kirch / Shutterstock.com

52-week range: $12.70 – $46.50

Plug Power (NASDAQ:PLUG) develops hydrogen fuel cell systems designed to replace conventional batteries in equipment and vehicles. The company’s vertically-integrated solution, Genkey, produces, transports and dispenses hydrogen for various applications.

In early August, Plug presented Q2 results. Revenue increased from $124.6 million to $151.3 million. Diluted loss per share was 30 cents compared to 18 cents the year before. Cash and equivalents totaled $2.3 billion.

The company was recently selected by New Fortress Energy (NASDAQ:NFE) to build a 120 megawatt green hydrogen plant near Beaumont, Texas. The new facility will use Plug’s proton-exchange membrane (PEM) electrolysis technology to produce more than 50 tons per day of hydrogen. According to the company, the facility will be scalable up to 500 megawatts with supporting infrastructure.

PLUG stock is down about 8% YTD, but up 4% over the past year. Shares are trading at 28.2 times sales. Finally, the 12-month median forecast stands at $35.

On the date of publication, Tezcan Gecgil did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Tezcan Gecgil has worked in investment management for over two decades in the U.S. and U.K. In addition to formal higher education in the field, she has also completed all 3 levels of the Chartered Market Technician (CMT) examination. Her passion is for options trading based on technical analysis of fundamentally strong companies. She especially enjoys setting up weekly covered calls for income generation.