Breakeven point ‘seems even further away’

Plug Power ‘repositioning the business to generate higher margins’, says analyst: break-even point ‘seems even further away’

Plug Power Inc. (NASDAQ:PLUG) shares plunged in early trading on Friday after the company reported disappointing results for the first quarter.

The results came amid a exciting earnings season. Here are some key takeaways from analysts.

Piper Sandler in the making

Analyst Kashy Harrison maintained an Underweight rating while lowering the price target from $2.90 to $2.50.

Plug Power reported a 43% annual decline in first-quarter revenues, missing expectations “due to the timing of electrolyzer site commissioning” and those revenues are expected to accrue into the second quarter, Harrison said in a note.

Management indicated that second quarter revenues would likely be in line with consensus of around $200 million and revenues in the first half of the year would be a third of the full year, which suggested revenues of around $980 million, in line with expectations, said the analyst.

“We still expect a decline in revenues in ’24 as PLUG moves away from sale/leaseback for materials handling, which offered unsustainably attractive customer economics,” he added.

BMO Capital Markets in Power Takeover

Analyst Meet Thakkar reiterated an Underperform rating and $2.50 price target.

Plug Power’s first-quarter results “again missed already low expectations,” Thakkar said. Shares rose after the release due to a sequential reduction in cash burn and “lower ATM utilization in 2Q QTD compared to what some may have expected (~$152 million since 4/1/2024),” he added.

The company’s free cash flows were negative $266 million and “we continue to see risk to PLUG’s -70% annual cash burn reduction target,” the analyst said. “The inflection in break-even gross margins appears even further away and the non-dilutive liquidity solution is still a concern as the timing of the DOE loan guarantee remains uncertain,” he further wrote.

check out other analyst stock ratings.

Roth Capital Partners at Plug Power

Analyst Craig Irwin reaffirmed a Buy rating and $9 price target.

Plug Power reported a first-quarter loss of 46 cents per share, versus consensus for a loss of 33 cents per share, Irwin wrote in a note. “PLUG is repositioning the business to generate higher margins, including vertical integration with green hydrogen production and the implementation of higher prices across all product lines,” he added.

“The target of a 70% reduction in cash usage in 2024 is tracking well, and we expect working capital and the release of PPA-restricted cash to improve the liquidity position,” said the analyst. Major hydrogen customers have accepted higher prices, while two of the eight are still in final negotiations, he added.

The story continues

KeyBanc Capital Markets On Plug Power

Analyst Sangita Jain maintained a Sector Weight rating on the stock.

Plug Power reported its first-quarter revenues of $120 million, below the intra-quarter forecast of $150 million, Jain said. She added, however, that revenues will likely improve sequentially and year over year in 2024.

“Management expects the results of price negotiations to be reflected in results as the year progresses and remains optimistic about converting leads into orders as FID is obtained,” the analyst wrote. “Despite the slowdown in cash burn, the main item on the agenda is securing the DOE loan and additional financing to strengthen the balance sheet,” he further stated.

PLUG Price Action: Plug Power shares were down 7.40% at $2.57 at press time on Friday.

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