Market Overview

Plug Power's Dismal Earnings Drag Down Fuel Cell Sector

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The fuel cell space is witnessing a spill over effect from the slump in shares of Plug Power Inc (NASDAQ: PLUG). Shares of Plug Power opened down more than 14 percent on Wednesday following dismal third quarter results reported before the market opened.

Other two marquee names in the fuel cell space, Ballard Power Systems Inc. (USA) (NASDAQ: BLDP) and FuelCell Energy Inc (NASDAQ: FCEL) also opened for trade almost 3 percent lower than Tuesday's closing price. It seems like the worse than expected results from Plug Power has shaken investors’ confidence in the fuel cell space overall.

Plug Power disappointed on both revenue and EPS. Analysts on the Street were expecting the company to report revenue in tune of $24.37 million and an EPS loss of $0.03, but Plug Power declared revenue of $19.9 million and an EPS loss of $0.04 per share.

Shares of Plug Power recently traded at $4.24, down 16.5 percent; FuelCell shares were trading at $1.90, down 6 percent; and Ballard shares were trading down 8 percent at $2.56.

With a consensus price target of $2.70, analysts are generally bullish on FuelCell energy. On August 15, analysts at Cowen and Company boosted their price target on the stock to $3.00 from $2.40.

Most analysts on the street maintain a Hold rating on Ballard, with the consensus price target of $3.70. On November 4, analysts at Roth Capital initiated a coverage on the stock with a Buy rating and price target of $3.50.

In the last year, stocks in the fuel cell space have outperformed the market significantly. Plug Power was the leader in this rally -- shares are up 708 percent year over year. Ballard and FuelCell Energy investors also witnessed significant capital appreciation, with the stocks being up 90 percent and 41 percent year-over-year, respectively.

Disclosure: The author has no positions in any securities mentioned.

Latest Ratings for PLUG

DateFirmActionFromTo
May 2020Morgan StanleyMaintainsEqual-Weight
Apr 2020Morgan StanleyMaintainsEqual-Weight
Mar 2020H.C. WainwrightMaintainsBuy

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