Shares of Plug Power Inc. ended decrease on Monday, extending a shedding streak to a sixth straight session after the fuel-cell firm spooked traders with a going-concern warning, a missed quarter and different ills.
The inventory weaved out and in of the pink Monday, and the gyrations got here after Plug Power’s inventory
dropped almost 50% final week, its worst for the reason that week ending Feb. 15, 2013.
The inventory has misplaced greater than 70% to date this 12 months, contrasting with good points of round 15% for the S&P 500
The 2023 loss can be a 3rd consecutive double-digit yearly loss for the inventory, as soon as a Wall Street surprise that rose greater than 900% in 2020.
Plug Power final week unveiled a slew of dangerous information for traders, beginning with a quarterly loss and a steerage withdrawal on account of a “severe” hydrogen scarcity.
Tucked in a regulatory submitting, the corporate additionally had the going-concern warning, saying it had an accrued a deficit of $3.8 billion as of Sept. 30.
Plug Power “has continued to experience negative cash flows from operations and net losses,” the warning continued.
Net losses have piled up, and Plug Power “expects to generate operating losses for the foreseeable future as it continues to devote significant resources to expand its current production and manufacturing capacity, construct hydrogen plants and fund the acquisition of additional inventory to deliver our end-products and related services..”
JPMorgan analysts downgraded their score on the inventory to the equal of maintain from purchase, saying that the third-quarter earnings “illustrated numerous near-term challenges the company is facing.”
“Once armed with a pristine balance sheet after raising meaningful capital, Plug’s short-term cash has been whittled down as a result of operational and scaling up challenges and an unfavorable hydrogen supply environment,” the JPMorgan analysts stated of their latest be aware.
“This has led to significant margin challenges and higher-than-expected cash burn,” they stated.
The firm “can cycle past its current cash-flow issues,” they stated, however “the current operating and capital markets environments are challenging and we believe [Plug Power] shares are likely to be rangebound over the next several quarters until clarity around its balance sheet is sorted out.”
Plug Power advised traders it’ll faucet capital markets and search Energy Department loans to shore up its funds.
“Previous examples of DOE funding are normally 6 months from contingency to approval,” so its traders should present “critical near-term funding,” analysts at Jefferies stated in a be aware.
Truist analysts lowered their value goal on the inventory to $6 from $8 and reiterated their maintain score on the shares. Plug Power “is feeling the pain of attempting to scale up multiple hydrogen-fueled segments in a heavily hydrogen-constrained market to the impediment of margins/cash flows,” they stated.
Evercore ISI analysts sounded just a little extra optimistic about Plug Power’s prospects. The Energy Department mortgage is predicted to be authorised and disbursed to Plug Power over the subsequent few quarters, “which should alleviate cash concerns,” they stated.
In the long run, “the green hydrogen economy is coming close to reality as favorable government legislation … continues to provide tailwinds,” they stated.
“We anticipate Plug to meaningfully expand margins as production plants ramp up, green hydrogen production costs decline, and the company begins monetizing” tax credit, they stated, retaining their score on the inventory on the equal of purchase.