Fuel Tech (FTEK) Stock: $4 Price Target From H.C. Wainwright

By Amit Chowdhry ● Nov 16, 2021
  • The shares of Fuel Tech Inc (NASDAQ: FTEK) have received a price target of $4. These are the details.

The shares of Fuel Tech Inc (NASDAQ: FTEK) have received a price target of $4. And H.C. Wainwright analyst Amit Dayal upgraded Fuel Tech to a “Buy” rating from a “Neutral” rating.

Dayal believes that an improving macro outlook for environmental remediation solutions and that the post-pandemic recovery is supporting higher energy demands playing into the company’s offerings. And the company has a significantly stronger balance sheet relative to the year-ago period with roughly $36 million in cash.

About a week ago, Fuel Tech announced its Q3 2021 results. These are the highlights:

— Consolidated revenues for the quarter declined to $7.6 million from $8.2 million in Q3 2020, reflecting higher revenues at FUEL CHEM offset by revenue declines in the APC segment.

— Gross margin for Q3 2021 was 49.2% of revenues compared to 72.4% of revenues in Q3 2020. Gross margin in Q3 2020 reflected a $2.6 million insurance settlement that reduced cost of sales at the APC business by a like amount. Excluding the settlement, consolidated gross margin for Q3 2020 was 40.7%.

— SG&A expenses declined to $2.8 from $3.2 million in Q3 2020, reflecting lower employee expenses and professional services.

— Operating income was $0.6 million compared to operating income of $2.4 million in Q3 2020. Excluding the impact of the settlement, operating loss in Q3 2020 was $0.2 million.

— Net income in Q3 2021 was $0.7 million, or $0.02 per share, compared to net income of $2.4 million, or $0.10 per share, in Q3 2020. Excluding the impact of the settlement, net loss in Q3 2020 was $0.2 million, or $(0.01) per share.

— Consolidated APC segment backlog at September 30, 2021 was $8.2 million compared to $5.3 million at December 31, 2020.

— APC segment revenues declined to $1.9 million in Q3 2021 from $2.9 million in Q3 2020. The APC gross margin in Q3 2021 was $0.8 million, or 41.7% of revenue, compared to $3.2 million, or 110.5% of revenue. Excluding the settlement, the APC gross margin for Q3 2020 was 20.8%.

— FUEL CHEM segment revenues rose to $5.6 million from $5.3 million in Q3 2020. The segment gross margin was 51.8% compared to 51.5% in Q3 2020.

— Adjusted EBITDA was $0.9 million in Q3 2021 compared to an Adjusted EBITDA of $2.7 million in Q3 2020. Excluding the settlement, adjusted EBITDA in Q3 2020 was $0.1 million.

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