Consequently, its GAAP EPS of -$0.27 also fell significantly below the estimates of -$0.16. As a result, Plug Power reported an adjusted EBIT margin of -97.1%, well below the consensus estimates of -57.8%. Moreover, the surge in natural gas prices and supply chain disruptions significantly impacted its adjusted EBIT margins. However, it came in well below the consensus estimates of $145.7M, up 102.5% YoY. Plug Power reported revenue of $140.8M in FQ1, up 95.7% YoY. Plug Power GAAP EPS $ consensus estimates (S&P Capital IQ) Plug Power revenue change % and adjusted EBIT margins % consensus estimates (S&P Capital IQ) In addition, also consider using any follow-on rallies to reduce exposure further. We urge investors to bail out of PLUG stock before it falls further. Therefore, we revise our Hold rating on PLUG stock to Sell. As a result, the stock could have been thrown into the "abyss" from here, with a free fall down to an undetermined support zone. Before breaking down, it validated our suspicion that it had been stuck in a two-year distribution pattern. Moreover, our price action analysis also suggests that PLUG finally broke below a decisive consolidation zone. Given the significant collapse in many unprofitable growth stocks that rode the speculative bubble in 2020, we think PLUG still has plenty of room to fall. Investors need to consider carefully that PLUG stock still traded well above its 2020 COVID bottom, despite being 80% off its pandemic-induced highs. In an early April update, we also discussed why we decided to get out of PLUG stock. Moreover, with highly challenging macros and a more aggressive Fed, the market didn't welcome its weak Q1 card. The company reported that the surge in natural gas costs had impeded its profitability.īut, keen investors in PLUG should be well aware that the company is still operating a deeply unprofitable business. ( NASDAQ: PLUG) recently reported an underwhelming FQ1 earnings card, as its margins came under significant pressure. Petmal/iStock via Getty Images Investment Thesis
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