Down 43% in This Bear Market, Can Plug Power Recover in 2023? – The Motley Fool

Date:

- Advertisement -

Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services.
You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More
Taking a bite out of most investors’ portfolios, the bear market has seen the S&P 500 plummet more than 17% since its start on Jan. 3, 2022. But the market has been particularly less than charged up about Plug Power (PLUG 3.58%), as the fuel cell specialist’s stock has plunged 43% in that time frame, according to data provided by S&P Global Market Intelligence.
Despite continued interest in expanding the role of hydrogen on the energy landscape, investors have lost enthusiasm for Plug Power, a popular name in the hydrogen industry that has continuously failed to prove that it can achieve profitability.
Despite the stock’s decline in 2022, Plug Power reported several achievements. For one, it continued growing the top line — something which it has excelled at over the past few years. Through the first nine months of 2022, Plug Power has booked sales of $480.7 million, representing a 41% increase over that which it reported during the same period in 2021.
Good news, right? Of course, for a growth company like Plug Power, seeing the company increase revenue is great, but the problem is what lies at the bottom of the income statement.
Over the first three quarters of 2022, Plug Power has reported a net loss of $500.5 million — significantly steeper than the $267.1 million net loss that it reported through the same period in 2021. Herein lies the problem. In 2022, investors became less tolerant of the company’s consistent losses.
And it’s not only the lack of profits that charged up the bears to sell off the stock last year. Equally concerning — if not more so — was the company’s consistent cash outflow. Through the first nine months of 2022, Plug Power reported negative cash from operations of $522 million. During the same period in 2021, Plug Power reported operational cash flow of -$349 million.
While the market has punished Plug Power’s stock during the bear market, the bulls seem to be returning. Shares of Plug Power are up 34% since the start of the new year, thanks in part to a newly announced supply agreement.
However, longtime followers of Plug Power know that this is far from uncommon. The stock’s history is replete with examples of it rising sharply due to promising news announcements.
The likelihood that shares fully recover from the slide they’ve suffered during the bear market is low if Plug Power continues to report steep losses — something which is likely to occur in the coming quarterly reports. Fortunately, for hydrogen investors, there are plenty of other options.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.
Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services.
Making the world smarter, happier, and richer.

Market data powered by Xignite.

source

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

ADVERTISEMENT

Popular

More like this
Related

IMF predicts global public debt will be at 93% of GDP by end of 2024

Global public debt will exceed US$100 trillion by the...

World Bank’s Banga says more bilateral debt forgiveness needed

World Bank President Ajay Banga said on Thursday (17...

Ghana, creditor panel agree on debt restructuring, paving way for IMF cash

Ghana has finalised a pact with its official creditor...

Nigeria strikes deal with Shell to supply $3.8 billion methanol project

Nigeria has struck a deal for Shell (SHEL.L), opens new...