#PRICE OF PLUG POWER FREE#

Its NTM FCF yield (-10.94%) remains well in the red. We urge investors to sell PLUG stock and not look back. When we decided to get finally get out, it was easy. PLUG stock NTM FCF yield % and NTM normalized P/E (TIKR)

#PRICE OF PLUG POWER FREE#

We also find it highly challenging to model its negative free cash flows with much veracity and, consequently, its valuation.

Given the significant miss in its Q1 estimates, we don't think the Street could even model Plug's business accurately.Īlso, without near-term guidance on its profitability from management, the Street's estimates could continue to underperform, impacting the validity of its valuation models. As a result, PLUG's path to its targeted 17% adjusted operating profitability by 2025 could be at risk. It was as if it wasn't necessary.įurthermore, several structural headwinds could continue to impede its profitability as Europe navigates its new natural gas realities with Russia.

In the present, how many companies will increase by over 80% this coming year in revenue? ( Plug Power's FQ1'22 earnings call)ĭespite management's attempt to assuage investors' concerns about its revenue growth cadence, it glaringly missed out on its profitability underperformance. But let me highlight the present is very bright. Plug's future is not based on the economy today, but on the future economy. In addition, the GAAP EPS estimates for future quarters have also been revised downwards to reflect the harsher economic realities.ĭespite badly missing the estimates, Plug took the opportunity to remind investors about its mission. Consequently, its GAAP EPS of -$0.27 also fell significantly below the estimates of -$0.16. As a result, Plug Power reported an adjusted EBIT margin of -97.1%, well below the consensus estimates of -57.8%. Moreover, the surge in natural gas prices and supply chain disruptions significantly impacted its adjusted EBIT margins. However, it came in well below the consensus estimates of $145.7M, up 102.5% YoY. Plug Power reported revenue of $140.8M in FQ1, up 95.7% YoY. Plug Power GAAP EPS $ consensus estimates (S&P Capital IQ) Plug Power revenue change % and adjusted EBIT margins % consensus estimates (S&P Capital IQ) In addition, also consider using any follow-on rallies to reduce exposure further.

We urge investors to bail out of PLUG stock before it falls further. Therefore, we revise our Hold rating on PLUG stock to Sell. As a result, the stock could have been thrown into the 'abyss' from here, with a free fall down to an undetermined support zone. Before breaking down, it validated our suspicion that it had been stuck in a two-year distribution pattern. Moreover, our price action analysis also suggests that PLUG finally broke below a decisive consolidation zone. Given the significant collapse in many unprofitable growth stocks that rode the speculative bubble in 2020, we think PLUG still has plenty of room to fall. Investors need to consider carefully that PLUG stock still traded well above its 2020 COVID bottom, despite being 80% off its pandemic-induced highs. In an early April update, we also discussed why we decided to get out of PLUG stock. Moreover, with highly challenging macros and a more aggressive Fed, the market didn't welcome its weak Q1 card. The company reported that the surge in natural gas costs had impeded its profitability.īut, keen investors in PLUG should be well aware that the company is still operating a deeply unprofitable business.

( NASDAQ: PLUG) recently reported an underwhelming FQ1 earnings card, as its margins came under significant pressure. Petmal/iStock via Getty Images Investment Thesis

Price of plug power