FuelCell Energy (FCEL) Drop 6.30% to 2025 Low as Backlog Declines, Cash Flow Turns Negative

FuelCell Energy (FCEL) shares fell 6.30% on Wednesday, hitting a new low since October 2025, with an intraday decline of 9.71%. The selloff reflects persistent concerns over the company’s financial stability and market position in the renewable energy sector.

The decline is linked to a deteriorating backlog, which has averaged a 4.8% annual decline over two years. This trend highlights challenges in securing new contracts, raising questions about the company’s ability to sustain revenue growth amid competitive pressures. Analysts note that weak order growth signals broader industry struggles, where innovation and contract acquisition are critical for survival.

Financial metrics further exacerbate investor worries. Free cash flow has turned negative, with the firm burning $230.2 million in cash over the past year despite holding $160.3 million in reserves. This has left the company with less than eight months of runway, increasing the likelihood of future equity raises that could dilute shareholder value. Recent share issuance in Q4 2024—adding 2 million shares—has already diluted ownership by 35% year-over-year.

Q4 2024 results underscored mixed performance. While revenue surged 120% to $49.3 million, driven by a single client in South Korea, operating losses widened to $41 million. Reliance on a concentrated client base and one-time service revenue from module exchanges has raised doubts about long-term sustainability. Meanwhile, short interest in the stock rose 20% sequentially in the quarter, amplifying downward pressure as bearish sentiment intensifies.

Broader sector risks also weigh on the stock. A proposed U.S. tax bill threatening to phase out solar and wind incentives by 2028 has created uncertainty for alternative energy players, indirectly affecting FCEL despite its focus on fuel cell technology. Policy shifts and slowing infrastructure development have dampened demand forecasts, compounding the company’s operational hurdles.

Restructuring efforts targeting grid and data center applications offer limited near-term relief. While data centers represent a growth opportunity, scaling these initiatives requires significant capital and time. Analysts remain skeptical, citing a “Reduce” rating consensus and a wide range of price targets ($5.00–$13.75), reflecting deep uncertainty. Until FCEL demonstrates consistent profitability or diversifies revenue streams, its stock is likely to remain volatile and underperform sector peers.