shares hydrogen fuel cell company plug power (NASDAQ: PLUG) After falling more than 10% in early trading on Friday, it later reversed course, erasing its losses and even rising 1.7% at 11:40 a.m., after the company reported “misses” on both sales and earnings in its 2023 earnings report this morning.
Going into the quarter, analysts weren’t too optimistic, expecting Plug to report a loss of $1.62 per share on sales of $900.3 million, but Plug disappointed investors on both fronts. Full-year sales reached $891 million, below expectations. And the loss was deeper than expected – $2.30 per share.
Plug Power Earnings Report
That’s not a good look for a stock that sells for just around $3.40 a share. Not a good look, either: Plug Power’s earnings press release announcing 2023 results came in an unusual format, lacking many of the details typically found in such press releases and, most notably, the usual financial statements to accompany it. Describe in detail how well (or poorly) the company is doing. (Admittedly, some of these reports are included in Yesterday’s 10-K filing and the U.S. Securities and Exchange Commission).
In today’s report, Plug tells us that in 2023 it opened a hydrogen plant in Georgia – “the largest PEM electrolyzer system in the United States”; expanded sales of fuel cell-powered stackers, including WalmartSam’s Club, The Home Depot, Amazonand Tyson; and announced a “record” annual revenue loss of $891 million, a 27% increase from 2022.It also told us it grew 84% per share to $2.30 per share and “acknowledged[d] Cash management challenges. “
Plug, however, did not specify its fourth-quarter results. For example, did Plug meet Wall Street’s goal of at least sustaining fourth-quarter sales and maybe even growing them slightly? we do not know. Was its quarterly loss better or worse? Worse than expected? Plug doesn’t tell us this either.
Management also didn’t provide any guidance on sales or profits in 2024.
Is Plug Power stock worth selling?
However, Plug did have some positive news to report specifically: “Plug has resolved the going concern issues previously disclosed in its Form 10-Q for the quarter ended September 30, 2023 and concluded that there are no Doubts about the company’s ability to continue as a going concern are growing.”
In a press release that lacked a lot of details, I suspect it was this line that did the damage, causing Plug stock to erase its early days and turn green near noon.That being said, I wouldn’t put too much credence in Prager’s assertion that everything is fine now, everything is fine, and the company actually no No more business.
After all, we know from yesterday’s 10-K filing that Plug will only have about $350 million in cash at the end of 2023, compared with nearly $965 million in current liabilities. We also know that Plug burns through about $1.8 billion in cash annually — roughly three times Plug’s 2021 burn rate.
Unless something changes at Plug soon, I still think the company will run out of cash in very short order – and I have no confidence in Plug Power’s ability to continue as a going concern.
Should you invest $1,000 in Plug Power right now?
Before buying Plug Power stock, consider the following factors:
this Motley Fool Stock Advisor The analytics team has just identified what they believe is 10 Best Stocks Investors can buy now… Plug Power is not one of them. The 10 stocks selected could generate huge returns in the coming years.
stock advisor Provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. stock advisor The service has more than tripled the S&P 500’s returns since 2002*.
*Stock Advisor returns as of February 26, 2024
John Mackey is the former CEO of Amazon subsidiary Whole Foods Market and a board member of The Motley Fool. Richie Smith Does not hold any of the above stocks. The Motley Fool owns and recommends Amazon, Home Depot, and Walmart. Motley Fool has disclosure policy.
Why Plug Power stock turned from red to green today Originally published by The Motley Fool
