Plug Power: On The Verge Of Failure - Sell

Nov. 09, 2023 10:37 PM ETPlug Power Inc. (PLUG) StockNKLA104 Comments

Summary

  • Plug Power reports abysmal quarterly results with revenue missing consensus expectations by a mile and consolidated gross margin deteriorating to new all-time lows.
  • Product gross margins turned negative for the first time in many years while unfavorable service contracts with key customers required an additional $41.6 million loss accrual.
  • Free cash flow was negative $410.4 million with remaining liquidity deteriorating to $569.8 million. The issue required the company to include going concern language in the 10-Q.
  • PLUG is likely to miss recently reduced full-year guidance by a mile again. In addition, management might be required to revise the company's ambitious long-term targets on the business update call in late January.
  • Given the current business headwinds in combination with a number of very negative near-term catalysts and the likely requirement to issue additional equity or equity-linked securities, investors should consider selling existing positions and moving on.
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Note:

I have covered Plug Power Inc. (NASDAQ:PLUG) previously, so investors should view this as an update to my earlier articles on the company.

After the close of Wednesday's regular session, Plug Power reported another set of abysmal quarterly

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This article was written by

Henrik Alex profile picture
19.02K Followers

I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.

I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.

Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within 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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