NEW YORK (TheStreet) -- Ballard Power Systems (BLDP - Get Report) shares are climbing, up 6.6% to $3.95, on Tuesday as the stock remains tethered to the performance of fellow fuel cell company Plug Power (PLUG - Get Report).
Plug shares are up 11% to $4.64 today after being upgraded to "outperform" by analysts at FBR Capital Markets who cited the company's potential expansion in Europe and fresh orders in the U.S. for the more optimistic outlook.
Plug remains the market bellwether for the fuel cell industry despite the extreme volatility the stock has shown over the last four months.
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TheStreet Ratings team rates BALLARD POWER SYSTEMS INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about their recommendation:
"We rate BALLARD POWER SYSTEMS INC (BLDP) a SELL. This is driven by a number of negative factors, 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. Among the areas we feel are negative, one of the most important has been poor profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The gross profit margin for BALLARD POWER SYSTEMS INC is currently lower than what is desirable, coming in at 33.95%. It has decreased from the same quarter the previous year. Along with this, the net profit margin of -25.16% is significantly below that of the industry average.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Electrical Equipment industry and the overall market, BALLARD POWER SYSTEMS INC's return on equity significantly trails that of both the industry average and the S&P 500.
- BLDP's debt-to-equity ratio is very low at 0.14 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, BLDP has a quick ratio of 2.34, which demonstrates the ability of the company to cover short-term liquidity needs.
- Net operating cash flow has slightly increased to -$6.64 million or 5.14% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -5.87%.
- This stock has increased by 111.36% over the past year, outperforming the rise in the S&P 500 Index during the same period. Regarding the future course of this stock, we feel that the risks involved in investing in BLDP do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- You can view the full analysis from the report here: BLDP Ratings Report