When many investors think of growth stocks, they think of Nasdaq stocks. Growth investors helped send the Nasdaq Composite (NASDAQINDEX:^IXIC) to monumental gains in 2020, and despite seeing pressure during much of 2021, the benchmark is still up for the year and within striking distance of all-time highs. On Friday morning as of 11:45 a.m. EDT, the Nasdaq was higher by almost 1.5%.
We’re largely in the lull between earnings seasons, and many closely followed companies listed on the Nasdaq have already released their latest financial results. However, there are a couple of stocks that a lot of investors will be watching closely next week when they issue their earnings. FuelCell Energy (NASDAQ:FCEL) and Stitch Fix (NASDAQ:SFIX) will provide two very different perspectives on how the overall economy is faring and what lies ahead as market participants look forward to a recovery for the rest of 2021 and beyond.
Looking for a boost
FuelCell Energy is set to report its fiscal second-quarter financial results on Thursday morning, June 10. Despite the enthusiasm that many investors have about the prospects for the hydrogen economy in light of advances in electric vehicles, FuelCell has seen its stock struggle.
There’s no question that the fuel-cell industry has a lot of promise. With European nations seeking to embrace clean energy, FuelCell has had a potentially large addressable market for years. Excitement about the prospects for building up that market helped FuelCell’s stock soar from $2 per share in late October 2020 to nearly $30 per share in February 2021.
However, FuelCell hasn’t done much to execute on its opportunity. Sales in FuelCell’s fiscal first quarter fell short of investor expectations by nearly a third, with a much steeper loss than expected. Moreover, FuelCell’s backlog remained stubbornly flat as the company seemed to fail to capture much in the way of new business.
As a consequence, FuelCell shares remain more than 60% below their best levels. Long-time investors have seen this story before from FuelCell, and the company desperately needs to build credibility with fundamental success in order to change a narrative that’s been quite disappointing for shareholders.
A fix for Stitch Fix?
Investors won’t have to wait quite as long to find out the latest from Stitch Fix. The subscription-based persona-style specialist and apparel-delivery company is set to report its fiscal third-quarter results on Monday, June 7 after the end of the regular trading session for the stock market.
Stitch Fix’s recent earnings releases have been a study in contrast. Fiscal first-quarter results in December showed double-digit percentage growth in sales and customer counts, and the company set encouraging guidance for sales growth of 20% to 25% for the remainder of the fiscal year. Yet three months later, Stitch Fix had to rein in those lofty expectations, and net losses remained stubbornly large and worse than most had expected to see.
Adding to the uncertainty is the surprise decision from CEO Katrina Lake to step down, effective as of the beginning of August. The founder will remain involved as executive chair of the board of directors, and many have plenty of confidence in heir-apparent Elizabeth Spaulding. Even so, it’ll be interesting to see who handles the conference call and addresses questions on future strategic direction.
Stitch Fix shares have more than doubled over the past 12 months, but they’re also down by roughly 50% from their highs early this year. What the fashion-curation specialist says about its latest results could play a key role in the long-term trajectory of Stitch Fix’s stock.
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.
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