Plug Power (NASDAQ:PLUG) is a company that has experienced significant volatility in the past years. Its shares plummeted from $30 in 2008 to its lowest level of $0.15 in 2013. Though the stock regained some momentum in following years, Plug Power shares remained volatile and continued to trade in the range of $2 with sharp sideways movement.
Plug shares have a 52-week trading range of $0.92 to $3.21. Its stock rallied 14% to $2.03 in today’s trading – with the market capitalization of $404 million.
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The instability in Plug Power share price was due to unstable revenues and mounting losses. Its losses grew from $35 million in 2012 to $129 million in the following twelve months.
Plug Power management said: “2017 gross margins were affected by customer programs that were pushed into 2018, and bookings for the year came in just short of the company’s goal.”
Its gross margin was impacted by three factors: excessive expediting cost, higher material and labor costs, and costs associated with hydrogen business. Overall, the company’s strategy of investing in growth opportunities could impact its margins in the short-term.
The future fundamentals for Plug Power appear unwelcoming considering lower than expected results for the fourth quarter and a depressing outlook for the first quarter of 2018.
The company generated revenue in the range of $30 million in the fourth quarter, down from $35 million in the past quarter.
On the positive side, it generated revenue growth of 50% in 2017 compared to fiscal 2016, thanks to continued success with Wal-Mart and a mega-deal with Amazon. Moreover, the company continues to generate strong results from the United States considering the deployment of 60 fueling stations. Plug Power management plan to expand their footholds in the European markets and expect to deploy more than 50 fuel stations this year.
For Q1, it expects to generate revenue in the range of $22M-$24M, substantially lower from analyst consensus estimate for $38.3M. Though full year revenue is likely to increase from 2017, the revenue forecast of $180M for 2018 fell short of the consensus estimate of $214M.
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