Plug Power Shares Decline on Earnings Miss; Positive Outlook Could Support the Upside

Plug Power

Plug Power (NASDAQ:PLUG) shares have been under pressure in the last twelve months; the stock lost its momentum amid lower than expected results in the last couple of quarters. PLUG shares dipped 22% in the previous three months, down 12% in the past six months. PLUG stock currently trades around $1.87 a share – with the 52-week trading range around $0.92 to $3.61.

Plug Power stock fell more than 2% today after it missed earnings estimates for the fourth quarter by $0.01 per share. The company generated year on year revenue growth of 3.3% to $33.6 million in the fourth quarter. It deployed 1,357 total GenDrive units in the final quarter, higher from 1,204 units in the same period last year.

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However, lower margins significantly impacted its earnings performance. The company posted a loss of $0.09 per share compared to the loss of $0.08 per share in the fourth quarter last year.

>>Plug Power Shares Are Under Pressure, Amid Unsteady Financial Numbers

Positive Outlook Could Support the Stock

Plug Power management expects a strong rebound in its financial numbers in fiscal 2018. The company expects its revenue to land in the range of $180 million for the full year, up from fiscal 2017’s revenue of $131 million. Moreover, the company plans to substantially reduce its service and hydrogen costs – which will allow it to achieve the EBITDA breakeven level in the second half of 2018.

Its CEO said, “We remain focused on expanding our footprint with present customers, completing multi-site agreements with the largest retailers and manufacturers, European business growth, and simplified hydrogen infrastructure to facilitate smaller distribution centers. We expect more success in all of these endeavors in the coming year.”

Plug Power has also been looking to expand its penetration in Chinese markets; the company is looking for a joint venture with a key Chinese player – this would allow the company to have a significant ownership position with protective governance rights. Its cash position appears strong enough to support investments in growth opportunities; PLUG generated almost $24 million in free cash flows in the fourth quarter of 2017, while its total cash position was standing around $68.1 million at the end of the last year.

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