Plug Power Inc. (NASDAQ: PLUG) founded in 1997 and headquartered in Latham, New York, is a clean energy company focused on designing, developing, manufacturing and commercializing hydrogen fuel cell systems. The company also has facilities in Spokane, Washington and Boulogne-Billancourt, France
Plug Power’s primary focus has been in the materials handling market, specifically electric forklifts and pallet jacks. It is now broadening its scope and focusing on electric vehicles and other industrial applications. The company offers an array of products for all phases of the energy consumption process including hydrogen fuel cell engines, hydrogen fuel cell systems, fueling delivery systems, stationary back up fuel cells, and maintenance services.
Notable customers include Nike, BMW, Wal-Mart, Home Depot, Mercedes-Benz, Kroger, and Whole Foods, and Amazon. The company was founded in 1997 as a joint venture between DTE Energy and Mechanical Technology and subsequently went public in 2002.
Products and Services
Hydrogen fuel cells have several advantages over typical lead-acid batteries. They are more reliable and can withstand more extreme temperatures and rugged environments. Other benefits include:
- Significantly shorter recharge times;
- Ability to hold more energy;
- Reduced greenhouse emissions;
- Fewer replacements; and
- Less costly to dispose of since materials are less hazardous.
- ProGen: Hydrogen fuel engine that is used as a component for the GenDrive and GenSure. It enhances the electric range (duration) and has a wide range of transportation applications. ProGen is generally sold as a component within Plug Power’s other products, but can also be sold standalone (provided ProGen engines to Fedex).
- GenDrive: Hydrogen Fueled Proton Exchange Membrane (PEM) fuel cell system used to power material handling vehicles.
- GenFuel: A delivery system to provide refueling to Plug Power products.
- GenSure (formerly ReliOn): Stationary fuel cell that provides back up power, grid supplementation, and off grid power.
- GenCare: A maintenance program for Plug Power products. This includes advanced system monitoring, preventative maintenance, periodic system enhancements, parts inventory logs, training, and rapid response onsite services.
All products integrate to create a complete solution: GenKey. It is a solution for customers transitioning their material handling vehicles or stationary power applications from typical lead batteries to hydrogen fuel cell power. GenKey solution includes GenFuel, GenCare, and GenDrive or GenSure.
Traders News Source previously wrote about Plug Power in April after the company announced a new multi-year dear with Amazon. The agreement called for the Plug Power’s hydrogen fuel cell technology to be integrated in 11 distribution warehouses, with additional facilities to be added thereafter. On the day the deal was announced, the shares gained 73 percent and closed at $2.25. Over the next week, Plug Power advanced a further 17 percent.
Three months later, the company announced that it had reached a new partnership agreement with Wal-Mart, one of its oldest and most important customers. Plug Power expects to deploy hydrogen fueling stations and fuel cell technology to 30 additional Wal-Mart sites over the next three years, with 10 sites already under contract and scheduled to be finished by the end of 2017. The 2017 commitments alone are estimated to be worth $80 million.
In addition to the new sites, Wal-Mart will provide project financing at a lower cost of capital, with no restricted cash, which is expected to render future transactions with Wal-Mart cash flow positive. In exchange, Plug Power has granted Wal-Mart warrants to acquire approximately 55 million shares at an average price of $2.1231 per share, a six percent discount from the recent closing price. The warrants will vest in installments tied to revenue milestones, up to a total of $600 million in aggregate payments from Wal-Mart for qualifying goods and services.
Shortly thereafter, the company reached an agreement with the NY Green Bank to increase its loan facility from $25 million to $45 million. Plug Power also reported that it had begun testing prototype delivery trucks for FedEx, and 5 / 7.5-ton delivery trucks in China. The company expects to begin more extensive on-road testing to begin in the third quarter of this year.
Second Quarter Earnings Review
Revenue for the quarter ended June 30, 2017, increased 10 percent year-over-year to $22.6 million. This was attributable to the delivery of four sites, which was in-line with prior guidance. However, the company noted that recurring revenue streams grew 24 percent from the same period one year ago. However, Plug Power’s gross profit for the quarter was negative $3.5 million.
Operating expenses increased nearly 80 percent year-over-year, as selling, general, and administrative expenses doubled from the same period one year ago. Research and development expenses also increased 27 percent to $6.6 million. Accordingly, net income for the second quarter totaled negative $43 million, or $0.19 per share, as compared to negative $13 million, or $0.07 per share, in the second quarter of 2016.
As of June 30, 2017, Plug Power listed $2 million in cash and equivalents, restricted cash of $52 million, and net working capital of $20.9 million. Net cash used in operations for the six months ended June 30, 2017, totaled $58 million, nearly four times that used in the six months ended June 30, 2016.
After reporting second quarter earnings, the company reaffirmed earlier guidance for 2017:
- Total GAAP Revenue of $130 million;
- GAAP Gross Margin of 8% to 12%;
- Bookings of $325 million; and
- $25 to $35 million of net cash used in operating and investing activities.
As of September 15, 2017, shares of Plug Power closed at $2.25 after gaining less than one percent on the day, yielding a market capitalization of approximately $500 million. In the past year, the stock has recovered from a low of $0.83 in February. The stock soared after the Amazon agreement was disclosed, but gave back many of those gains after the company reported first quarter earnings. Shares received another boost after the Wal-Mart deal, but have remained volatile. The stock has shown strong resistance at $2.00 and has generally traded above that sine June.
Following are selected analyst ratings and price targets:
|Amit Dayal||Rodman & Renshaw||Buy||$4.00||8/9/2017|
- Improved profitability on the company’s existing business;
- Entry into the Chinese market;
- Possible applications of the company’s technology to consumer vehicles; and
- Further large customer wins.
- The company’s customer base is highly concentrated and highly dependent on two large customers;
- The company has yet to reach profitability, and it is uncertain when earnings will turn positive;
- Product costs are not yet competitive with existing technologies; and
- Due to recent agreements with Amazon and Wal-Mart, investors face significant dilution risk.
After our prior report, Plug Power secured a new deal with one of its largest customers and improved key terms for financing. This gives the company greater visibility for future revenues and costs, and should make future financial results more predictable. However, first and second quarter results were largely disappointing, and many investors remain wary that the company can turn the newly-signed agreements with Amazon and Wal-Mart into positive cash flows.
Still, the company maintains that it is on track to meet full-year guidance, implying a strong recovery in the second half of 2017. Management believes that the largest headwinds have already passed, and Plug Power can now begin to realize the economic benefits of investments made earlier in the year. Second half results will be a good indication of whether the company can attain profitability in 2018 as anticipated.
Free membership limited time below.
See our track record, it speaks for itself…
Traders News Source recent profiles and track record, 380% in verifiable potential gains for our members on 3 small cap alerts alone! These are just three examples from over two dozen winners this year. We have had the #1 gainer on the entire NASDAQ exchange 8 times this year so far and one that was the #1 gainer on the exchange two days in a row (NASDAQ: SPEX) moved from $1.01 to $4.75/ share within three days of our profile.
January 31st, 2017 (NASDAQ: HIMX) opened at $5.10/share and hit a high of $9.68/share March 24th, 2017 for gains of 89% within 60 days- http://finance.yahoo.com/news/himax-technologies-review-4q-2016-130000319.html
May 23rd, 2016- (NYSE: XXII) opened at $.87/share hit a high of $3.03/share so far our member potential gains- 248% – http://mailchi.mp/tradersnewssource/updates-5-of-our-profiles-for-212-400-and-whats-coming-next?e=[UNIQID]
(NASDAQ: OBCI) coverage began February 7th, 2017 opening at $4.10/share. This coverage was due to the consistent exceptional quarterly growth coupled with a special divvy issued last year and as anticipated was announced again this year. So far OBCI has traded as high as $5.90/share for potential gains of 43% so far. http://mailchi.mp/tradersnewssource/updates-5-of-our-profiles-for-212-400-and-whats-coming-next?e=[UNIQID]
These are numbers that make traders drool. Any trader in any market would fall all over themselves to see numbers like this. So, if you’ve been on the fence, perhaps it’s time to start doing some research and verify our numbers for yourself. We are constantly raising the bar and separate ourselves from the rest of the small-cap newsletters as the best in business.
We know with a large following comes a large responsibility as we have everyone from institutional investors to the beginner following our profiled securities in our newsletters. This is something we take very seriously always seeking small cap growth companies that have both near and long-term potential for our members.
Big Opportunities Trading Small Cap Stocks
***Get our small cap profiles, special situation and watch alerts in real time. We are now offering our VIP – SMS/text alert service for free, simply text the word “Traders” to the phone number “25827” from your cell phone***
Traders News Source is a wholly owned subsidiary of Traders News Source LLC, herein referred to as TNS LLC.
Traders News Source has not been compensated for this report by anyone and the opinions if any are that of the author Ivan Neilson, CFA. Author’s Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I, wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in the article.
This web site, published by TNS LLC, and is an investment newsletter that is built on the premise of assisting individual investors in learning about investing. Our goal as publishers of financial information is to provide research and analysis of investments to our subscribers. TNS LLC does not give buy or sell recommendations. We do purchase distribution rights from analyst, financial writers and bloggers for a fee that may be licensed to issue price targets and recommendations. Furthermore, we encourage you to speak to a licensed professional prior to making an investment in any type of publicly traded security.
We do sell advertising to other companies including brokerage firms, web sites, publicly traded issuers, investor relations firms, and investment publications, among others. TNS LLC makes no warranty as to the policies of these organizations, and in no way endorses their offers, services, or the content of their advertisements.
When an advertiser is a publicly traded company or a third party acting on behalf of a public company, we fully disclose all compensation in the email advertisement. Such disclosure is included in a disclosure statement in each of the advertisements sent via email.
Our reports/releases are a commercial advertisement and are for general information purposes ONLY. We are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on our site or emails unless you can afford to lose your entire investment. The disclaimer is to be read and fully understood before using our services, joining our site or our email/blog list as well as any social networking platforms we may use.
PLEASE NOTE WELL: TNS LLC and its employees are not a Registered Investment Advisor, Broker Dealer or a member of any association for other research providers in any jurisdiction whatsoever.
Release of Liability: Through use of this website viewing or using you agree to hold TNS LLC, its operator’s owners and employees harmless and to completely release them from any and all liability due to any and all loss (monetary or otherwise), damage (monetary or otherwise), or injury (monetary or otherwise) that you may incur. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data. TNS LLC encourages readers and investors to supplement the information in these reports with independent research and other professional advice. All information on featured companies is provided by the companies profiled, or is available from public sources and TNS LLC makes no representations, warranties or guarantees as to the accuracy or completeness of the disclosure by the profiled companies. None of the materials or advertisements herein constitute offers or solicitations to purchase or sell securities of the companies profiled herein and any decision to invest in any such company or other financial decisions should not be made based upon the information provide herein. Instead TNS LLC strongly urges you conduct a complete and independent investigation of the respective companies and consideration of all pertinent risks. Readers are advised to review SEC periodic reports: Forms 10-Q, 10K, Form 8-K, insider reports, Forms 3, 4, 5 Schedule 13D.
TNS LLC is compliant with the Can Spam Act of 2003. TNS LLC does not offer such advice or analysis, and TNS LLC further urges you to consult your own independent tax, business, financial and investment advisors. Investing in micro-cap and growth securities is highly speculative and carries an extremely high degree of risk. It is possible that an investor’s investment may be lost or impaired due to the speculative nature of the companies profiled.
The Private Securities Litigation Reform Act of 1995 provides investors a ‘safe harbor’ in regard to forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions or future events or performance are not statements of historical fact may be “forward looking statements”. Forward looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. Forward looking statements in this action may be identified through use of words such as “projects”, “foresee”, “expects”, “will”, “anticipates”, “estimates”, “believes”, “understands”, or that by statements indicating certain actions & quote; “may”, “could”, or “might” occur.
Understand there is no guarantee past performance will be indicative of future results. In preparing this publication, TNS LLC has relied upon information supplied by its customers, publicly available information and press releases which it believes to be reliable; however, such reliability cannot be guaranteed. Investors should not rely on the information contained in this website. Rather, investors should use the information contained in this website as a starting point for doing additional independent research on the featured companies. The advertisements in this website are believed to be reliable, however, TNS LLC and its owners, affiliates, subsidiaries, officers, directors, representatives and agents disclaim any liability as to the completeness or accuracy of the information contained in any advertisement and for any omissions of materials facts from such advertisement. TNS LLC is not responsible for any claims made by the companies advertised herein, nor is TNS LLC responsible for any other promotional firm, its program or its structure.