Plug Power (PLUG) Recovers Some Losses in Advance of Earnings Release

NEW YORK (TheStreet) -- Plug Power  (PLUG) recovered some of its losses from Tuesday afternoon as it was rising more than 14% to $6.89 at 11:25 a.m. on Wednesday. The company plans to report earnings before the market opens on Thursday.

Plug Power had soared to an one-year high of $11.72 on Tuesday, but a bearish report from Citron Research sent the stock, along with peer companies Ballard Power Systems  (BLDP) and FuelCell Energy (FCEL), into free fall on Tuesday afternoon.

In the report, Citron stated Plug Power would be fairly valued at 50 cents. The firm estimates the company has lost close to $850 million since the 2000 crash and has yet to develop intellectual property or "meaningful revenue growth."

Analysts surveyed by Thomson Reuters expect Plug Power to report a net loss of 8 cents a share in its fourth-quarter report and 48 cents a share for the full fiscal year 2013.

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

"We rate PLUG POWER INC (PLUG) 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. 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, slightly underperformed the industry average of 5.8%. 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 average is still marginally south of the industry average growth rate of 2.38%.
  • You can view the full analysis from the report here: PLUG Ratings Report

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Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

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