Why Plug Power (PLUG) Is Gaining Today

NEW YORK (TheStreet) -- Plug Power (PLUG) jumped 30% to $2.01 on Thursday after news that it met projected order targets for the fourth quarter of 2013.

In a press release, the fuel cell company announced that orders in the fourth quarter "totaled approximately $32 million." That includes contracts with companies including Wal-Mart (WMT), Kroger  (KR), Coca-Cola (KO), Procter & Gamble (PG), and CVS (CVS), among others. Orders from repeat customers such as Wal-Mart and Kroger include fleet expansion and follow-on orders.

Plug Power hasn't yet released full financial results for the quarter. That information will be announced in an earnings call on Jan. 14.

TheStreet Ratings team rates PLUG POWER INC as a Sell with a ratings score of D-. TheStreet Ratings Team has this to say about its recommendation:

"We rate PLUG POWER INC (PLUG) a SELL. This is driven by multiple 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 54.0% 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 10.2%. 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 19.57%.

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