![]() As a result, the company has relied on its shareholders’ funds for its operations. However, since its founding, the company has also struggled to profit. Although the company has a history worth a quarter of a century, its solutions have gained traction in the past few years, with many companies starting to develop electric vehicles. The company is headquartered in Latham, New York, and has facilities in Spokane, Washington and Rochester, New York.Īt its core, the company is engaged in developing hydrogen fuel cell systems that replace conventional batteries in equipment and vehicles powered by electricity. In 1997, the company had its initial public offering at $15 per share. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.Plug Power was founded in 1997 and was a joint venture between DTE Energy and Mechanical Technology Inc. On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. Ultimately, even if you have high hopes for the future of the hydrogen market, there’s no need to jump into a hasty investment in Plug Power. I expect it to become a penny stock, which we can informally define as a stock that trades below $5. Therefore, I’m not optimistic about the near-term future of PLUG stock. In its shareholder letter, Plug Power claimed that it’s “focused on key initiatives to enable revenue growth and path to profitability.” Personally, I can see company’s revenue growth, but Plug Power’s path to profitability is unclear. However, this doesn’t mean that the company is on the right financial path. Plug Power’s loyal shareholders can certainly celebrate the company’s top-line growth. That’s highly disappointing, especially considering Plug Power’s huge revenue intake. However, the company did worse than that, posting a loss of 35 cents per share. ![]() Analysts had called for Plug Power to report a first-quarter 2023 earnings loss of 26 cents per share. ![]() Significant financial outlays seem to be taking a toll on Plug Power’s bottom line. Going forward, Plug Power’s shareholders should insist that the company’s management establish a specific action plan to cut costs. This bothers me, as I didn’t see much discussion about how Plug Power intends to reduce its expenditures in the company’s quarterly press release and conference call. What about the cost of revenue, though? From the year-earlier quarter to Q1 2023, Plug Power’s cost of revenue jumped 58.77% ($176.153 million to $279.682 million). Plug Power’s Escalating Costs Could Be Problematic for PLUG StockĪs mentioned earlier, Plug Power’s revenue increased 49%, and that’s impressive. Plug Power claims it’s positioned to “achieve significant revenue and continued margin expansion throughout the year.” Yet, it remains to be seen whether Plug Power’s margins can actually improve in 2023. Thus, just because Plug Power is reporting improvement in its sales doesn’t mean the company is converting those sales into strong profits. Notably, Plug Power’s gross margin declined 8% year over year to -33%. It’s perfectly fine for PLUG stock investors to celebrate the company’s sales acceleration. Still, I’m glad to give credit where it’s due. Having generated $210.29 million in revenue during the quarter, Plug Power beat the analyst consensus estimate, but only by 2.5%. That’s understandable, as Plug Power’s 49% revenue improvement from 2022’s first quarter to Q1 2023 is definitely impressive. ![]() In Plug Power’s first-quarter 2023 shareholder letter, the company emphasized its year-over-year top-line growth. ![]()
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