NEW YORK (TheStreet) -- Shares of Plug Power (PLUG) were gaining 4.9% to $2.81 on heavy trading volume Tuesday after the company announced a new hydrogen and fuel cell expansion contract with Walmart Canada (WMT).
Plug Power announced that it will provide 124 GenDrive fuel cells for Walmart Canada's new High Velocity Distribution Center building in Balzac, Alberta, Canada. The expansion contract will bring the site's fleet up to 230 units.
"Plug Power values Walmart Canada as a client and strives to help them further their productivity improvements through the use of our hydrogen and fuel cell products," Plug Power CEO Andy Marsh said. "This expansion project illuminates the success seen to date -- success Plug Power intends to continue through our work with this important customer."
About 5.5 million shares of Plug Power were traded by 2:48 p.m. Tuesday, above the company's average trading volume of about 3.1 million shares a day.
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 weak operating cash flow and generally disappointing historical performance in the stock itself."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Net operating cash flow has significantly decreased to -$13.65 million or 53.52% 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.
- PLUG's stock share price has done very poorly compared to where it was a year ago: Despite any rallies, the net result is that it is down by 37.39%, which is also worse that the performance of the S&P 500 Index. Investors have so far failed to pay much attention to the earnings improvements the company has managed to achieve over the last quarter. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- 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 6.30, which clearly demonstrates the ability to cover short-term cash needs.
- 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 -$0.65 versus -$0.79 in the prior year. This year, the market expects an improvement in earnings (-$0.22 versus -$0.65).
- You can view the full analysis from the report here: PLUG Ratings Report