Plug Power (NASDAQ:PLUG) stock is down 14% today amid a slurry of analyst downgrades following the company’s recent earnings call. What’s behind Plug’s losses?
Well, on Wednesday afternoon the hydrogen technology company reported worse-than-expected financial results, despite managing to beat revenue estimates. Indeed, Plug reported a loss per share of 40 cents in its fiscal second quarter, well beyond Wall Street projections of a 27-cent loss.
The company did manage to beat sales estimates, reporting $260.2 million in revenue compared to $237.7 million expected. Additionally, Plug reiterated its previous guidance for full-year revenue of between $1.2 billion to $1.4 billion.
It seems investors are more concerned with the company’s production timeline, rather than its pertinent financials, however. Plug stated its hydrogen-making plants in Louisiana, New York and Texas will achieve full production in 2024. This is later than previous guidance for Louisiana to achieve full production by late 2023. Meanwhile, the New York and Texas facilities were slated to hit terminal production by the first half of 2024. Now, it will likely be the second half.
Plug Chief Executive Andy Marsh attempted to ease investors in describing the scale of the company’s production advances.
“The journey of mastering the construction of hydrogen plants, spanning factory capabilities, developing customers, and concurrently introducing array of new products has undoubtedly been demanded. However, we firmly believe that the efforts investing in these undertakings will yield substantial benefits for all those vesting in Plug’s success.”
PLUG Stock Sinks on Analyst Pessimism
Despite the company’s best efforts to assure investors of the company’s progress, analysts are clearly skeptical.
Roth MKM analyst Craig Irwin downgraded PLUG from “buy” to “neutral,” following the earnings report, while lowering its price target from $13 to $7.50. At the time of writing, PLUG stock is trading for $9.30 per share.
Other analysts maintained their ratings but expressed some concern over the company’s new timeline. This includes TD Cowen analyst Jeffrey Osborne, who has maintained his “buy” rating and $23 price target, while noting immediate headwinds for the company.
“Management remained very optimistic about its ability to achieve its expected financial targets … But given the scar tissue built up over the past quarters and continued delays in project timelines, we see expectations skewing toward the lower end for 2023.”
Plug stock has been something of a tenuous case this year. Indeed, PLUG is down 23% year-to-date, even as the Nasdaq Composite is up more than 30% over the same period.
While investors are largely optimistic over Plug’s future potential, the near-term picture remains blurrier than would be preferred.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
