FCEL's 2026 Losses May Shrink 64%: Is It Enough to Buy?

FuelCell Energy FCEL is expected to lose a lot less money in fiscal 2026 than it did in fiscal 2025. The Zacks Consensus Estimate calls for a loss of $1.58 per share, representing a 64.2% year-over-year improvement. Still, investors need to look beyond the percentage improvement. FCEL is not expected to be profitable yet, so the key question is whether its growing business opportunities can eventually produce steady earnings and cash flow.

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FCEL’s Earnings Outlook Is Improving

The expected reduction in losses is one of the strongest points in FuelCell Energy’s favor. A smaller loss suggests that the business may be moving closer to covering its costs, although the company is not yet expected to become profitable. The main question is whether this improvement can continue.

FuelCell Energy has said that annual production of at least 100 megawatts is important for moving toward positive adjusted EBITDA. Put simply, FCEL needs to make and sell more systems so that factory and operating costs are spread over a larger revenue base.

Bloom Energy BE and Plug Power PLUG also compete in parts of the fuel-cell and distributed-power market, making execution important for FCEL. As Bloom Energy expands its on-site power business and Plug Power develops its hydrogen and fuel-cell operations, FCEL will need higher sales volumes and better cost control to turn its improving earnings outlook into lasting financial progress.

AI Data Centers Offer FCEL a Big Opportunity

FuelCell Energy’s clearest growth driver is rising electricity demand from artificial intelligence and data centers. These facilities need reliable power around the clock and often cannot wait years for new grid connections. FCEL’s systems can generate electricity directly at the customer’s site, reducing dependence on the wider power grid.

Its proposal pipeline reached about 4 gigawatts, with roughly 89% linked to data-center opportunities. FCEL’s 12.5-megawatt FuelCell Energy Block can also be added in stages as customers need more power.

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The opportunity is attracting rivals. Bloom Energy is also targeting data centers with on-site power systems, confirming the importance of this market. Plug Power, while better known for hydrogen, is pursuing fuel-cell power applications as well. Their presence shows that FCEL is addressing a promising market, but one where competition is intensifying.

FCEL also has projects in South Korea and is developing carbon-capture technology with ExxonMobil, giving it additional ways to grow beyond data centers.  

Price Performance Shows Expectations Have Risen

FuelCell Energy has already delivered a strong run in 2026, with shares up 156.5% year to date. The gain is well ahead of Plug Power, which has risen 10.1%, and also exceeds Bloom Energy’s 134.8% advance this year. The sharp rally suggests that investors have already become much more optimistic about FCEL’s growth prospects, particularly its exposure to rising data-center power demand.

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The strong performance also raises the bar for the company. With FCEL outperforming both Bloom Energy and Plug Power, further gains will increasingly depend on whether the company can turn its growing pipeline into signed contracts, increase production and continue narrowing losses. If business progress falls short of these expectations, the stock could face pressure after such a substantial rise.

FCEL’s Backlog and Funding Risks Keep the Story Balanced

FuelCell Energy had about $1.14 billion in orders already under contract, giving investors some idea of future revenues. However, its much larger sales pipeline is less certain because many projects are still only being discussed with potential customers. Until those talks turn into signed agreements, investors cannot assume that all of that potential business will eventually generate revenues.

FCEL had nearly $441 million in total cash, including restricted cash and equivalents, but manufacturing expansion will require meaningful spending. It has also raised money through common-stock sales, which can dilute existing shareholders.

These challenges are familiar across the sector. Bloom Energy also runs a manufacturing-heavy business, while Plug Power shows how costly clean-energy expansion can be before profits become consistent. FCEL must therefore balance growth spending with the need to improve margins and limit funding pressure.

Conclusion

FCEL’s expected improvement in fiscal 2026 losses is a strong step in the right direction. AI-driven data-center demand, manufacturing expansion, international opportunities and carbon capture give the company several ways to grow. However, the clean energy company is still expected to post a loss, much of its pipeline is not yet under contract, and expansion requires significant spending. The stock’s strong rally also means expectations are already high. For now, the improved earnings outlook is encouraging and supports a more positive stance. FuelCell Energy currently carries a Zacks Rank #2 (Buy), suggesting investors may consider the stock while watching for clearer signs of improving profitability and more proposal conversions.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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