FCEL: U/G to Buy on Fit Deal, Increased Confidence on Data Center Power Upside

Research evidence excerpt

FCEL: U/G to Buy on Fit Deal, Increased Confidence on Data Center Power Upside

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item to monitor, we view this agreement as an important de-risking event.

Pipeline conversion is the key catalyst. The 5 GW U.S. pipeline, 89% data center-related, provides

Market skepticism on the likelihood of the

meaningful upside: even 10% conversion would represent 500 MW, more than 5x current annual

deal with Fit materializing beyond 30MW

capacity. Inuverse and SDCL remain active opportunities, and the Fit order strengthens confidence

firm contract announced on Wednesday,

that additional data center-driven orders can materialize. With standardized 12.5 MW Blocks

was evident with the stock closing down

accelerating customer engagement, we see rising potential for positive estimate revisions as

on the day of the deal announcement

backlog conversion progresses. Quarterly order activity remains the key metric to track. Pipeline

and further underperformance on Thursday.

conversion timing remains the swing factor for our FY27/28 estimates.

While critique of this initial deal is relevant,

500 MW expansion increasingly supported by demand and balance sheet. Torrington plant we see this as still an early call to Upgrade.

expansion targeting 5x capacity scale-up with the $200-275mn capex plan over 24 months, with The risk-reward skews constructive; Bloom is

only $20-30mn expected in FY26, is well-supported by ~$426mn of unrestricted cash and improving creating a pathway for alternatives to gain

operating burn. Management guided to a 100 MW production run-rate next year, 10-15% product market attention. We are more optimistic

margin at that level, and adjusted EBITDA breakeven by 4Q27. Importantly, customer conversations on the management being able to close on