Why Hydrogen Fuel Cell Maker Plug Power Is Being Pummeled
Fuel cell maker Plug Power's stock is getting pummeled after the company reported negative revenue in the fourth quarter and for the full year. Are things really that bad?
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Plug Power Inc. (NASDAQ: PLUG) reported fourth-quarter and fiscal 2020 results before markets opened Thursday morning. The hydrogen fuel cell maker posted a net loss per diluted share (EPS) of $1.12 on negative net sales of $316.3 million. In the same period a year ago, the company reported a net loss per share of $0.07 on sales of $91.7 billion. Fourth-quarter results also compare to consensus estimates for a net loss per share of $0.01 and $87.3 million in sales.
For the full year, Plug Power reported a net loss per share of $1.58 and negative sales of $100.5 million, compared with a 2019 loss per share of $0.36 and sales of $230.2 million.
On January 5, the company had warned that it faced a “substantial one-time non-cash charge” in the fourth quarter related to the accelerated vesting of certain warrants owned by Amazon.com NV Investment Holdings. The amount turns out to be $456 million out of a reported net loss of $476.2 million. Based on the fourth-quarter share count of 425.4 million, that works out to a net loss per share of nearly five cents, still considerably worse than the expected loss of one cent.
Plug Power reported gross billings of $96.3 million in the fourth quarter and $337 million for the full year, both records. The company deployed more than 2,200 fuel cells in the fourth quarter and more than 9,800 in 2020.
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A green bond issue and a follow-on stock offering have boosted the company’s cash position significantly, with the company beginning 2021 with $5 billion in cash, including about $1.6 billion announced Thursday morning. Plug Power and Korea’s SK Group closed a deal first announced on January 6, creating a partnership to accelerate the development of hydrogen as an alternative fuel in Asia. SK Group now owns a stake of about 9.6% in Plug Power.
Plug Power also announced last year a 50/50 joint venture with France’s Groupe Renault that is targeting a 30% share of a European market expected to reach 500,000 fuel cell-powered light vehicles by 2030. The two firms have been cooperating for nearly a year and expect to close the deal formally this summer.
The stock traded down more than 6% Thursday morning to $46.95, in a 52-week range of $2.53 to $75.49. The consensus price target on the stock is $62.89, and daily average trading volume exceeds 40 million shares.
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Paul Ausick has been writing for 247Wallst.com for more than a decade. He has written extensively on investing in the energy, defense, and technology sectors. In a previous life, he wrote technical documentation and managed a marketing communications group in Silicon Valley.
He has a bachelor's degree in English from the University of Chicago and now lives in Montana, where he fishes for trout in the summer and stays inside during the winter.
