Is PLUG Stock A Buy After Reporting Mixed Q1 Results?

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Plug Power (PLUG), a starring shaper of hydrogen substance cells, is trying to rebound arsenic momentum successful renewable vigor lifts shares. Is PLUG banal a bargain close now?

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Latham, N.Y.-based Plug Power supplies hydrogen substance cells chiefly for forklifts successful ample warehouses. Its substance cells regenerate accepted batteries successful instrumentality and vehicles powered by electricity. Plug Power clients see retail giants Amazon (AMZN), Walmart (WMT), Nike (NKE) and Home Depot (HD). PLUG banal went nationalist successful 2002.

The institution aims to nutrient much than fractional of its hydrogen vigor from wholly renewable sources by 2024. It besides aims to subdivision retired from forklifts to heavy-duty vehicles to service ports successful the U.S. and Europe, arsenic good arsenic stationary substance cells to powerfulness information centers and organisation hubs.

Plug Power's Partnerships

On June 3, Plug and French carmaker Renault said their Hyvia associated task to marque hydrogen-powered vans was nether way. The concern plans to statesman gathering 3 types of fuel-cell vans astatine existing Renault plants successful France by the extremity of this year. The 3 models volition beryllium based connected the Renault Master level of vans and usage the aforesaid electrical motors that present powerfulness the all-electric mentation of the Master.

The task besides includes the installation of hydrogen charging stations crossed Europe, proviso of carbon-free hydrogen arsenic good arsenic attraction and absorption of fleets.

In April, oilfield supplier Baker Hughes (BHI) joined Plug Power and Chart Industries to found a backstage money that provides superior for large-scale, clean-hydrogen infrastructure projects.

Meanwhile, connected Feb. 25,  South Korean conglomerate SK Group closed its $1.6 cardinal concern into a associated task with Plug Power to grow hydrogen vigor successful Asia. The associated task should motorboat this year.

The concern volition supply hydrogen substance compartment systems, hydrogen fueling stations and electrolyzers to South Korea and different Asian markets.

Expanding Footprint

On June 10, Plug Power announced plans to physique a works successful Camden County, Georgia. The works volition nutrient 15 tons per time of liquid greenish hydrogen intended to substance proscription applications, including worldly handling and substance compartment electrical conveyance fleets. Plug Power is investing $84 cardinal successful the facility, which is to unfastened successful 2022.

On March 30, Plug Power said it planned to unfastened a greenish hydrogen accumulation works successful south-central Pennsylvania with Brookfield Renewable Partners. PLUG banal jumped 11% connected the news. Construction is slated for the archetypal 4th of 2022. The works is expected to beryllium online by precocious 2022.


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Plug Power Earnings And Fundamental Analysis

On May 14, Plug Power restated 2020 revenue, adding $7.2 cardinal to bring it to antagonistic $93.2 million. It reduced 2019 gross by astir $300,000 and 2018 gross by astir $400,000. In 2020 losses widened by 10 cents a stock to $1.68, portion 2019 per-share losses remained unchanged and 2018 losses widened by 3 cents a share.

Hydrogen substance  cells(Kaca Skokanova/shutterstock.com)

CEO Andy Marsh said the adjustments were non-cash and had nary interaction connected concern operations.

On June 22, Plug Power reported mixed Q1 results, aft doubly delaying the report. It posted a 12-cents-a-share nonaccomplishment vs. estimates for an 8-cent loss. It had gross of $72 million, up 76.5% and supra views.

Plug Power shipped 1,308 GenDrive units, up 58.5% from a twelvemonth ago.

The institution said concern was impacted by the Texas frost successful February, which caused a spike successful earthy state prices causing hydrogen prices to jump. Higher freight costs owed to pandemic-related congestion astatine ports besides added to costs.

Plug Power sees hydrogen prices declining meaningfully successful the 2nd fractional of the year, improving margins. CEO Marsh said successful an net telephone that investors should expect $115 cardinal to $120 cardinal of gross billings for Q2, astir 40% of targeted gross of $475 cardinal per year.

Marsh besides hinted Plug Power was adjacent to adding a 5th large customer, which helium says could "do implicit $25 million" successful the 2nd fractional of 2021.

The institution antecedently estimated gross billings of $750 cardinal successful 2022 and $1.7 cardinal successful 2024.

RBC Capital Markets connected June 30 initiated sum with an outperform standing and a terms people of 42. It cited ample maturation imaginable successful planetary hydrogen marketplace and Plug's enactment presumption successful substance compartment worldly handling. It besides highlighted its accidental to leverage expertise into different extremity markets including stationary powerfulness and transportation.


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PLUG Stock Technical Analysis

The banal gapped up arsenic overmuch arsenic 13% to 33.72 aft announcing Q1 earnings.  Shares are inactive good beneath their 52-week precocious of 75.49 intraday connected Jan. 26.

PLUG banal plunged connected March 16, erstwhile the institution said it was restating fiscal statements. Management cited accounting errors mostly related to noncash items, including however it classified immoderate costs. Shares jumped aft releasing the restated financials.

PLUG banal on with different fuel-cell peers were dragged down further successful aboriginal May, aft Ballard Power Systems (BLDP) missed net and gross estimates and raised doubts astir the assemblage arsenic a whole.

Third Bridge expert Peter McNally says the accounting mistake raises a reddish flag.

"While immoderate whitethorn presumption the restatement arsenic backwards looking and simply a substance of accounting rules, Plug Power does person aboriginal targets that Third Bridge experts person questioned," helium said successful an earlier email to IBD.

Plug Power's comparative spot enactment is trending downward. While its RS Rating is 92 retired of a imaginable 99, its EPS Rating is conscionable 13. With a Composite Rating of 38, Plug is ranked No. 13 successful IBD's alternate vigor manufacture group.

Fund ownership presently stands astatine 38% arsenic a increasing fig of funds are buying Plug Power shares. As of March 2021, 866 funds held PLUG stock, up from 578 successful December 2020.


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Growing Competition

McNally said Plug Power is efficaciously babelike connected 2 customers, which makes the company's concern fragile. "In addition, Plug Power is not the lone institution successful this abstraction that has been capable to rise capital, truthful we expect stronger contention successful the years to come," helium said.

Rival FuelCell Energy (FCEL) is No. 7 successful the group. Ballard Power Systems and Bloom Energy (BE) are besides substance compartment stocks successful the alternate vigor manufacture group.

Plug Power is making strides to diversify. On April 29, Plug Power announced a program to integrate its ProGen substance compartment engines into BAE Systems' electrical buses. The 2 companies volition besides enactment connected processing hydrogen and refueling infrastructure to end-customers usage points.

Meanwhile, automakers General Motors (GM), Toyota (TM) and Nikola (NKLA) are anxious to clasp hydrogen too.


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Is PLUG Stock A Buy Now?

JPMorgan estimates the wide marketplace accidental could transcend $200 billion. Plug Power is raising superior to concern an ambitious buildout program and forging partnerships with cardinal manufacture players.

But it has yet to beryllium that it tin execute profitability. This is possibly owed to the information that for present it supplies substance cells for conscionable 1 conveyance — forklifts. While it has plans to manufacture hydrogen substance cells for different industries, a wait-and-see attack is astir apt much prudent

Moreover, determination could beryllium a hitch successful Plug Power's program to physique a works successful southwestern New York. On June 4, the Seneca people sued Genesee County Economic Development Center implicit plans to physique an concern parkland that they accidental infringes connected their territory. Plug Power's is slated to go the archetypal tenant of that park.

Bottom line: PLUG banal is not a bargain close present arsenic it is not successful a bargain portion with nary discernible signifier forming.

Check retired IBD Stock Lists and different IBD contented to find dozens much of the best stocks to bargain oregon watch. 

Follow Adelia Cellini Linecker connected Twitter @IBD_Adelia.

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