Will Plug Power (PLUG) Bottom Out Today?

Tickers in this article: PLUG

NEW YORK (TheStreet) -- Plug Power  continued lower on Tuesday. The stock has soared 982% in the past six months and 3,680% in the past 12 months before its starting a downward trend over the past week. Plug closed a week ago at $11.41, and on Tuesday was down 4.5% to $6.22

Zacks Equity Research calculated that 20.4% of the company's floating stock is sold short. Zacks rated Plug as a "buy," however, because of increased earnings estimates for the hydrogen fuel cell manufacturer.

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Plug isn't new to wild speculation and outsized expectations. The stock rose to more than $1,500 a share in the early 2000s only to fall as low as 13 cents in 2013.

The company saw a bump after last Thursday's fourth-quarter earnings release, in which the company reported a 2013 loss of $63 million on revenue of $27 million, but the stock has moved lower since.

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Separately, TheStreet Ratings Team has this to say about its recommendation:

"We rate PLUG POWER INC (PLUG) a SELL. This is driven by several 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 weak operating cash flow."

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 240.8% when compared to the same quarter one year ago, falling from -$8.47 million to -$28.88 million.
  • Net operating cash flow has significantly decreased to -$8.94 million or 93.52% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
  • PLUG POWER INC's earnings per share declined by 27.3% in the most recent quarter compared to the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. 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 (-$0.11 versus -$0.79).
  • Compared to its closing price of one year ago, PLUG's share price has jumped by 4789.97%, exceeding the performance of the broader market during that same time frame. 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.
  • The revenue growth came in higher than the industry average of 5.8%. Since the same quarter one year prior, revenues rose by 35.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • You can view the full analysis from the report here: PLUG Ratings Report
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