Plug Power (PLUG) has seen an explosion of volume over the last month as speculation of its fuel cell technology will be used in all type of cars. Along with that volume increase there has been an increase in volatility as the stock has moved in dramatic fashion. Today, it is a Zacks Rank #1 (Strong Buy) stock and is the Bull of the Day.
Recent Fuel Cell Buzz
Not too long ago, Tesla (TSLA) announced plans to build what they call a Gigafactory. The Gigafactory is designed to reduce cell costs much faster than the status quo and, by 2020, produce more lithium ion batteries annually than were produced worldwide in 2013. The instant read through on this is that demand is moving higher for fuel cells.
The competition for TSLA have followed suite with Honda, Toyota and General Motors all recently talking about plans for electric vechiles.
Company Description
Plug Power is an alternative energy technology provider working with fuel cell systems for the industrial off-road markets worldwide. Plug Power Inc. was founded in 1997 and is headquartered in Latham, New York.
Cowen Downgrades Despite Strong Quarter
On March 14, Cown downgraded the stock from Outperform to Market Perform and noted that the valuation was 'full'. Investors paid close attention to this report as the stock moved from $8 prior to the downgraded to a low of $5.45 one week later. Yet 3 trading days after that low, the stock spiked back over $8 on speculation of a deal with Volkswagon.
Since that most recent spike, the stock has maintained in the $7 range.
Poor Earnings History
Over the last four quarters, PLUG has beaten the Zacks Consensus Estimate only 2 times. In fact, the company has only 2 beats over the last nine quarters.
Investors certainly don't like looking at the historical revenue trend. The last three quarters reported revenues have been $8M, $5M and $7M. Those small numbers tend to scare investors right out of digging any depper on a stock like this, but that would be foolish. Bookings are great measure of expected future revenues and PLUG has been seeing bookings grow.
The recent Cowen downgrade note that they expect the company to have bookings of $150M compared to $70M at the end of 2014.
PLUG Sees Estimates Moving Higher
Estimates for PLUG have risen recently. The Zacks Consensus Estimate for 2014 stood at a loss of $0.19 in July last year. It then moved to a loss of $0.17 by October and was trimmed again to a small loss of $0.11 in January. The current Zacks Consensus Estimate is calling for a loss of $0.09 for this year and is expecting a profit of $0.05 next year.