FuelCell Energy (NASDAQ:FCEL) high volatility trend continues
 | By Gabriel Shpitalnik | Macroaxis Story |
FuelCell Energy is currently does not generate positive expected returns and assumes 5.7086% risk (volatility on return distribution) over the 60 days horizon. While some risk-seeking stakeholders are getting worried about industrials space, it is reasonable to summarize FuelCell Energy as a possible investment alternative. We will summarize if the expected returns on FuelCell Energy will justify its current volatility.
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Reviewed by Vlad Skutelnik
The company currently holds 201.05 M in liabilities with Debt to Equity (D/E) ratio of 1.84, which is about average as compared to similar companies. FuelCell Energy has a current ratio of 2.08, suggesting that it is liquid enough and is able to pay its financial obligations when due. The firm shows a Beta (market volatility) of -14.3066, which means a somewhat significant risk relative to the market. Let's try to break down what FuelCell's beta means in this case. As returns on the market increase, returns on owning FuelCell Energy are expected to decrease by larger amounts. On the other hand, during market turmoil, FuelCell Energy is expected to outperform it. Even though it is essential to pay attention to FuelCell Energy historical returns, it is always good to be careful when utilizing equity current trending patterns. Our philosophy towards predicting any stock's future performance is to check both, its past performance charts as well as the business as a whole, including all available technical indicators. FuelCell Energy exposes twenty-eight different technical indicators, which can help you to evaluate its performance. FuelCell Energy has an expected return of -0.2%. Please be advised to confirm FuelCell Energy information ratio, downside variance, day median price, as well as the relationship between the treynor ratio and kurtosis to decide if FuelCell Energy stock performance from the past will be repeated at some point in the near future. Volatility is a rate at which the price of FuelCell Energy or any other equity instrument increases or decreases for a given set of returns. It is measured by calculating the standard deviation of the annualized returns over a given period of time and shows the range to which the price of FuelCell Energy may increase or decrease. In other words, similar to FuelCell's beta indicator, it measures the risk of FuelCell Energy and helps estimate the fluctuations that may happen in a short period of time. So if prices of FuelCell Energy fluctuate rapidly in a short time span, it is termed to have high volatility, and if it swings slowly in a more extended period, it is understood to have low volatility. Please read more on our technical analysis page.
Watch out for price decline
Please consider monitoring FuelCell Energy on a daily basis if you are holding a position in it. FuelCell Energy is trading at a penny-stock level, and the possibility of delisting is much higher compared to other stocks. However, just because the stock is trading under one dollar, does not mean it will be marked for deletion. Most exchanges require public instruments, such as FuelCell Energy stock to be traded above the $1 level to remain listed. If FuelCell Energy stock price falls below $1 for 30 consecutive trading days, the exchange can delist it. Once the company reaches this point, they will be sent an initial price violation notice directly from an exchange.
How important is FuelCell Energy's Liquidity
FuelCell Energy financial leverage refers to using borrowed capital as a funding source to finance FuelCell Energy ongoing operations. It is usually used to expand the firm's asset base and generate returns on borrowed capital. FuelCell Energy financial leverage is typically calculated by taking the company's all interest-bearing debt and dividing it by total capital. So the higher the debt-to-capital ratio (i.e., financial leverage), the riskier the company. Financial leverage can amplify the potential profits to FuelCell Energy's owners, but it also increases the potential losses and risk of financial distress, including bankruptcy, if the firm cannot cover its debt costs. The degree of FuelCell Energy's financial leverage can be measured in several ways, including by ratios such as the debt-to-equity ratio (total debt / total equity), equity multiplier (total assets / total equity), or the debt ratio (total debt / total assets). Please check the breakdown between FuelCell Energy's total debt and its cash.
FuelCell Energy Gross Profit
FuelCell Energy Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing FuelCell Energy previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show FuelCell Energy Gross Profit growth over the last 10 years. Please check FuelCell Energy's gross profit and other fundamental indicators for more details.
FuelCell Energy Volatility Drivers
FuelCell Energy unsystematic risk is unique to FuelCell Energy and usually not directly affected by the market or economic environment. An example of unsystematic risk is the possibility of poor earnings or a layoff due to coronavirus. One may mitigate nonsystematic risk by buying different securities in the same industry or by buying in different sectors. For example, if you have a position in FuelCell Energy you can also buy Kimball Electronics. You can also mitigate this risk by investing in the industrials sector as well as in companies having nothing to do with it. This type of risk is also called diversifiable risk and can be understood from analyzing FuelCell Energy important indicators over time. Here we run a correlation analysis between relevant fundamental ratios over at least ten year period to find a relationship in the way they react to changes in FuelCell Energy income statement and balance sheet. Here are more details about FuelCell volatility.Click cells to compare fundamentals
What is driving FuelCell Energy Investor Appetite?
The entity reported the previous year's revenue of 68.9 M. Net Loss for the year was (100.98 M) with loss before overhead, payroll, taxes, and interest of (969 K).
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