This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

It's Not Too Late to Detach From Plug Power

NEW YORK (TheStreet) -- The world of financial writing can be a lonely place some times, especially when you're wrong. Although I didn't win many friends recently for suggesting that investors detach themselves from Plug Power (PLUG - Get Report), it turns out I was right. But don't confuse this for gloating. Timing this stock and predicting its next move has been hard. 

Wednesday morning, the fuel cell power specialist reported results that missed Street revenue targets, which sent the stock tumbling down around 7%. Total first-quarter revenue dropped 12.5% year over year to $5.6 million. I don't think that was as bad as some estimates, which called for revenue of $5.35 billion and a 17% decline.

However, when looking at the segmental performances, the story was far different. There was no way anyone can be pleased with a 32% decline in product revenue. Although the 62% year-over-year jump in service revenue mitigated some of that damage, the 25% drop in research contracts gave it all back.

More than anything, it is this sort of performance that causes the dilemma as to whether this stock should be invested in or traded.

WATCH: More market update videos on TheStreet TV | More videos from Keris Alison Lahiff

Even though the fuel cell industry continues to carry robust projections and plenty of optimisms, there is no evidence this company can effectively monetize that demand. From an operational perspective, this belief was affirmed. 

Plug Power reported an adjusted net loss of 6 cents per share, which was less than half the 13 cents non-GAAP loss per share seen a year ago. While that is impressive in its own right, it still wasn't enough to meet Street estimates of a 5-cent loss. 

This continues the company's string of weak fundamentals, including last quarter's 241% year-over-year decline in net income, which fell from -$8.47 million to -$28.88 million. Despite this underperformance, investors still piled in on the stock, which had (at one point) soared more than 4,500% over the past year, reaching a 52-week high of $11.72 in March. But since that March high, Plug has lost almost 70% of its value. Reality has set in, and it says, valuation matters. 

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
PLUG $1.93 0.00%
AAPL $93.13 -0.12%
FB $117.66 -0.13%
GOOG $703.90 0.35%
YHOO $36.91 -0.08%


Chart of I:DJI
DOW 17,631.57 -29.14 -0.17%
S&P 500 2,049.70 -0.93 -0.05%
NASDAQ 4,716.1060 -0.9880 -0.02%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs