Plug Power 'Repositioning The Business To Drive Higher Margins,' Analyst Says: Breakeven 'Seems Even Farther Away'

Zinger Key Points
  • Plug Power’s Q1 revenues declined by 43% Y/Y, missing expectations, one analyst says.
  • The company posted loss per share of 46 cents, much worse than expectations of 33 cents, another analyst notes.

Plug Power Inc PLUG shares tanked in early trading on Friday, after the company reported disappointing results for the first quarter.

The results came amid an exciting earnings season. Here are some key analyst takeaways.

Piper Sandler On Plug Power

Analyst Kashy Harrison maintained an Underweight rating while reducing the price target from $2.90 to $2.50.

Plug Power reported a 43% year-on-year decline in first-quarter revenues, missing expectations "due to timing of electrolyzer site commissioning" and these revenues are expected to accrue in the second quarter, Harrison said in a note.

Management indicated second-quarter revenues are likely to be in line with the consensus of around $200 million and revenues in the first half of the year would be one-third of the full year, which suggested revenues of around $980 million, in-line with expectations, the analyst stated.

"We still expect declining revenues in ’24 as PLUG has transitioned away from sale/leasebacks for material handling which offered unsustainably attractive customer economics," he added.

BMO Capital Markets On Plug Power

Analyst Ameet Thakkar reiterated an Underperform rating and price target of $2.50.

Plug Power's first-quarter results "missed already low expectations again," Thakkar said. The shares rose after the release due to a sequential reduction of cash burn and "lower ATM utilization in 2Q QTD versus what some may have expected (~$152M since 4/1/2024)," he added.

The company's free cash flows were negative by $266 million and "we continue to see risk to PLUG's -70% y-o-y cash burn reduction target," the analyst stated. "Inflection to break-even gross margins seems even farther away and non-dilutive liquidity solution still a concern as timing of DOE loan guarantee remains uncertain," he further wrote.

Check out other analyst stock ratings.

Roth Capital Partners On Plug Power

Analyst Craig Irwin reaffirmed a Buy rating and price target of $9.

Plug Power reported a first-quarter loss of 46 cents per share, versus consensus of a loss of 33 cents per share, Irwin wrote in a note. "PLUG is repositioning the business to drive higher margins, including vertical integration with green hydrogen production and implementing higher prices across all product lines," he added.

"Targeted 70% reduction in 2024 cash use is tracking well, and we expect working capital and release of PPA restricted cash to improve the liquidity position," the analyst stated. Major hydrogen customers have accepted higher pricing, while two of eight are still in final negotiations, he added.

KeyBanc Capital Markets On Plug Power

Analyst Sangita Jain maintained a Sector Weight rating on the stock.

Plug Power reported its first-quarter revenues at $120 million, lower than its intra-quarter guidance of $150 million, Jain said. She added, however, that revenues are likely to improve sequentially and year-on-year in 2024.

"Management expects the results of pricing negotiations to reflect in results as the year progresses and remains upbeat on converting prospects into orders as FID are taken," the analyst wrote. "Despite the slowdown in cash burn, the primary item on the agenda is to secure the DOE loan and additional funding to shore up the balance sheet," she further stated.

PLUG Price Action: Shares of Plug Power had declined by 7.40% to $2.57 at the time of publication on Friday.

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