FuelCell Energy (FCEL) Stock Keeps Gaining: Here’s Why

FuelCell Energy FCEL Stock News

FuelCell Energy Inc (NASDAQ: FCEL) has been on a pretty monumental run as of late. Just think about it, 30 days ago, the stock was trading at just $0.51 per share. So far in the premarket, it’s up more than 6%, now trading at $2.44 per share.

So, what’s the deal? Why are investors so excited about the stock? Well, there’s a bit to it:

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FCEL Stock Continues To Soar

First and foremost, let’s talk about the most recent news from the company. A couple of sessions ago, FuelCell Energy issued a press release announcing the successful development and launch of new technology.

In late 2018 production has officially shifted from a 5-year life stack design to a 7-year life stack design. Of course, the goal was to extend the life of the stack, therefore, increasing its value.

In the release a couple of days ago, FCEL announced that the move was a success. To date, performance is meeting expectations, suggesting that the newly-designed stack will have a life span of at least 7 years.

So far, early prototypes of this technology have been in operation for about two years. Other stacks have been in operation for about a year. In all instances, the new stacks are trending toward a 7-year life expectancy.

This is overwhelmingly positive news. The most important figure here is 40%. In the release, FCEL outlined the fact that the new stacks are expected to generate 40% more power over the course of their lives, equating to a 40% decrease in effective cost per kWh output.

While the new stacks are 40% more effective in power generation, they are only about 5% more expensive to produce. As such, the new stacks will greatly reduce operating costs for the clients that use them.

Interest In Fuel Cell Technology Is Very High

Recently, we’ve seen several stories hitting the tape surrounding increasing demand for cleaner energy. In particular, we’ve seen some pretty big deals surrounding fuel cell technology.

Most recently, Plug Power (NASDAQ: PLUG) soared just a couple of sessions ago after announcing that it had entered into a two year agreement with a large, but unnamed, customer.

Under the terms of the agreement, PLUG will provide fuel cell equipment and services, generating $172 million over the term of the agreement.

While this agreement wasn’t signed with FCEL, it’s a great thing for the stock. After all, FuelCell Energy is a leading provider in the industry, and as the industry as a whole gains steam, the company is likely to benefit. So, any insinuation of increased interest in clean energy, and in fuel cell technology in particular, is a win for the company.

Geopolitical Unrest May Lead To More Opportunity

Unfortunately, the geopolitical stage is a pretty scary one at the moment. However, that may bode well for FCEL and other non-oil energy companies.

A recent drone strike by the United States took out a top official of Iran. Of course, this has Iran on their toes and looking for targets to attack that will hurt the United States.

While the war isn’t likely to hit the mainland, the United States has several allies, bases, and more around the world. Importantly, the oil industry as a whole is important to the United States, and seems to be a favorite target of Iran.

There are fears that Iran will start to attack oil refineries, production facilities, and tankers in response to the recent drone strike on their top military official. Should this happen, we coiuld see mass amounts of oil being taken off of the market, at least for a short period of time. In this case, interest in clean energy would likely increase as the cost of traditional oil-related energy would rise.

So, while the geopolitical stage may be hard to watch, there are always winners and losers in war, and FCEL may just be one of the winners should the conflict continue to escalate.

The Bottom Line

The bottom line here is simple. FCEL is developing the next generation of fuel Cell technology, and is proving to be successful in doing so. At the same time, demand is naturally kicking up, and a geopolitical push in demand may make the situation even better for the stock and its investors. All in all, FCEL is one to watch.

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