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Plug Power: Glutton For Punishment

Mar. 07, 2018 9:04 PM ETPlug Power Inc. (PLUG)27 Comments


  • The bulls have really been gluttons for punishment in Plug Power as every success is met with severe disappointment in other performance metrics.
  • The strength of this company is in growing its top line and expanding its global presence.
  • The company has returned to seeing massive losses, but we think this is the year the company has to get to breakeven EBITDA.
  • If the company cannot deliver breakeven EBITDA now, it may never be profitable, and with it, the stock will fall.

What did we ever see in Plug Power (NASDAQ:NASDAQ:PLUG)? Plug Power has just reported earnings and once again we are left with disappointment, and yet intrigue. We had such high hopes for this company, but much of the spark is gone. The bulls have really been glutton’s for punishment in this name. Plug has done a wonderful job in growing its presence and increasing sales, but it just cannot turn a profit, and we are nearly as sour on the name now as we were when the decade began and this was a penny stock. For every success, there is failure in the name. It has been a very frustrating investment for many. It is our opinion that if the company cannot deliver breakeven returns now, it may never achieve them, as top line sales are strong and cost reductions programs are in full effect. Let us discuss.

Some days the bulls win; some days the bears win

Sales are the company’s strong suit, and yet one of the largest points of contention. Plug Power continues to draw very diverse investors, some who are passionate bulls, and others who are perennial bears. The somewhat comical nature of this frustrating trade is that depending on the month, the bulls could be winning, or the bears could be winning. We can all agree, the bears are winning the argument when it comes to profitability

Well, with the most recent year in the books, score another one for the bears. We thought over the course of numerous pieces in 2016 that 2017 would be the year it all changed, the year that the company would finally turn a profit. We were so wrong. In fact, it wasn’t even close breakeven, and the losses started widening again:

Source: SEC filings, chart made by author

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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in PLUG over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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