NEW YORK (TheStreet) -- After scoring triple-digit gains last week, Plug Power (PLUG - Get Report) has begun to reverse course on Monday. By mid-morning, the alternative fuel-cell developer had shed 14% to $1.77 on trading volume nearly doubled its three-month daily average, making it one of the markets' biggest decliners and most actively-traded.
Over the five trading days to Friday, the Latham, N.Y.-based business increased 180% after management said the company would likely turn a profit in 2014, the first time since its market debut 14 years earlier. Several big-order clients are expected to sign in the company's fourth-quarter ended December generating $30 million to $40 million in revenue while provide a recurring revenue stream over a multi-year agreement.
Plug Power's reversal is dragging on others in the fuel-cell industry. FuelCell Energy (FCEL - Get Report) has dropped 4% to $1.65, while Ballard Power Systems (BLDP - Get Report) is off 4.7% to $1.62.
TheStreet Ratings team rates Plug Power Inc as a Sell with a ratings score of D-. The team has this to say about their recommendation:"We rate Plug Power Inc (PLUG) a SELL. This is driven by a few notable weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income and disappointing return on equity." Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Electrical Equipment industry. The net income has significantly decreased by 54% when compared to the same quarter one year ago, falling from -$10.33 million to -$15.90 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, Plug Power Inc's return on equity significantly trails that of both the industry average and the S&P 500.
- PLUG, with its decline in revenue, underperformed when compared the industry average of 10.1%. Since the same quarter one year prior, revenues slightly dropped by 3.1%. The declining revenue has not hurt the company's bottom line, with increasing earnings per share.
- PLUG's debt-to-equity ratio of 0.85 is somewhat low overall, but it is high when compared to the industry average, implying that the management of the debt levels should be evaluated further. Regardless of the somewhat mixed results with the debt-to-equity ratio, the company's quick ratio of 1.21 is sturdy.
- Net operating cash flow has slightly increased to -$7.01 million or 1.82% when compared to the same quarter last year. Despite an increase in cash flow, Plug Power Inc's cash flow growth rate is still lower than the industry average growth rate of 19.68%.
- You can view the full analysis from the report here: PLUG Ratings Report
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