FuelCell (NASDAQ:FCEL) stock, which was once trading at a high of $29, trade at something closer to $6 today.

The company may not be as popular as other clean energy plays, but the shift toward clean energy makes FCEL stock a compelling opportunity at these prices.

The shift towards clean energy will be one of the major trends for the next 10 years.

This trend is widespread and has the potential to create many multi-bagger stocks. Over the past few months, there’s been a correction among many high-growth clean energy stocks, but the pullback seems rather excessive.

A Closer Look at FCEL Stock

FuelCell’s latest earnings surprised analysts to the upside. It was not too surprising that Q3 2021 earnings caught analysts off guard given the bearish sentiment on the stock.

FuelCell had a quarterly loss of $0.04 per share versus the analyst forecasted loss of $0.05 per share. This loss was much lower as well as the loss of $0.07 per share reported at the same time last year.

The company continues to narrow its losses and may soon achieve breakeven operations.

Typically for fast-growing companies like FuelCell looking at the revenue growth is more important. As long as the company isn’t burning an inordinate amount of cash, revenue growth is the key driver to valuation.

The company reported revenues of $26.82 million for Q3 2021. This was higher than the $18.73 million reported the same time last year by 43%. Revenue in Q3 2021 was also 26.56% higher than analysts’ consensus estimates.

Remember that FuelCell is primarily in the business of providing the technology for its environmentally responsible fuel cell platforms.

Specifically, FuelCell’s technology is involved in the long-term storage of energy, large-scale carbon capture, hydrogen power, and other green energy solutions.

Therefore it is important to have a hard look at the primary sources of the company’s revenue growth. Investors need to make sure that the growth generated is organic and sustainable.

Revenue Is Growing at a Healthy Rate

I am pleased to see for the quarter that service and licensing revenues were a driver of growth for the company in this quarter. Revenues in this segment increased from $7.1 million in Q3 2020 to $14.3 million this quarter. This seems to indicate that the company is beginning to gain traction with regard to selling its technology.

The company has done a good job of growing its energy generation portfolio as well.

In Q3 2021 generation revenues were $6.2 million compared to $4.7 million the year prior. This was a 32% increase and as a result of more efficient operations and more generation facilities.

FuelCell is planning to grow this segment of the business by 100% in 2022.

Assuming these trends continue, FuelCell should be able to deliver on its 2022 goals of positive EBITDA and continued double-digit revenue growth.

Investor Takeaway

FuelCell could become a lucrative company in the near future as the federal and state governments across the country begin to push for cleaner sources of power.

For example, recently California Governor Gavin Newsom signed a bill that encourages businesses to invest in clean power technology. This bill exempts onsite fuel cell systems of up to 5 MW from paying load charges to California’s utility companies.

California tends to lead the way when it comes to progressive climate agenda. Therefore I expect other states to adopt similar measures soon. This could have the possible effect of increasing demand for FuelCell’s products.

The company is well-positioned to capitalize on the clean energy trend. However many analysts are still a bit bearish on the company.

Looking at the company’s Tipranks page, FuelCell has an average price target of $7.33 and a “moderate sell” rating. Price targets range from a low of $6.00 to a high of $8.00.

There could be significant upside to FCEL stock if the company achieves its earnings goal. I believe that investors should keep FCEL stock on their watchlists.

On the date of publication, Joseph Nograles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joseph Nograles is a part-time freelance copywriter focused on the financial industry. He has worked in a wide variety of industries from tech to consulting with one of the “big four.” He has always enjoyed analyzing businesses and has been a CFA charterholder for nearly a decade now.