NEW YORK (TheStreet) -- Plug Power (PLUG) shares are up 4% to $2.88 on heavy trading on Tuesday as the fuel cell maker benefits from FuelCell Energy's (FCEL) mixed fourth quarter earnings results. FuelCell reported fourth quarter net loss of 2 cents per share that was in line with expectations of revenue of $54.4 million that was ahead of analysts' guidance.
The Latham, NY-based company has been the bellwether for the entire sector after CEO Andrew Marsh said late last year that the company would be profitable this fiscal year for the first time since its initial public offering in 1999.
The fuel cell maker's shares have fallen in recent weeks due to falling oil prices that investors believe will dampen demand for alternative fuel sources, though numerous analysts have come out and said that the two industries are not in competition with one another.
Plug Power set its full year revenue guidance between $70 million and $75 million. Through three quarters the company has reported revenue of about $43 million. The company reports its fourth quarter earnings results in March.
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 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. Among the areas we feel are negative, one of the most important has been weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$11.09 million or 58.18% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- 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, PLUG POWER INC's return on equity significantly trails that of both the industry average and the S&P 500.
- PLUG's debt-to-equity ratio is very low at 0.02 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 7.84, which clearly demonstrates the ability to cover short-term cash needs.
- This stock has increased by 75.14% 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 PLUG do not compensate for any future upside potential, despite the fact that it has seen nice gains over the past 12 months.
- PLUG POWER INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. This trend suggests that the performance of the business is improving. During the past fiscal year, PLUG POWER INC continued to lose money by earning -$0.79 versus -$0.94 in the prior year. This year, the market expects an improvement in earnings (-$0.19 versus -$0.79).
- You can view the full analysis from the report here: PLUG Ratings Report