Why Hydrogen Fuel Cell Maker Plug Power Is Being Pummeled

Industrials

Published: February 25, 2021 10:28 am

Plug Power Inc. (NASDAQ: PLUG) reported fourth-quarter and fiscal 2020 results before markets opened Thursday morning. The hydrogen fuel cell maker posted a net loss per diluted share (EPS) of $1.12 on negative net sales of $316.3 million. In the same period a year ago, the company reported a net loss per share of $0.07 on sales of $91.7 billion. Fourth-quarter results also compare to consensus estimates for a net loss per share of $0.01 and $87.3 million in sales.

For the full year, Plug Power reported a net loss per share of $1.58 and negative sales of $100.5 million, compared with a 2019 loss per share of $0.36 and sales of $230.2 million.

On January 5, the company had warned that it faced a “substantial one-time non-cash charge” in the fourth quarter related to the accelerated vesting of certain warrants owned by Amazon.com NV Investment Holdings. The amount turns out to be $456 million out of a reported net loss of $476.2 million. Based on the fourth-quarter share count of 425.4 million, that works out to a net loss per share of nearly five cents, still considerably worse than the expected loss of one cent.

Plug Power reported gross billings of $96.3 million in the fourth quarter and $337 million for the full year, both records. The company deployed more than 2,200 fuel cells in the fourth quarter and more than 9,800 in 2020.

A green bond issue and a follow-on stock offering have boosted the company’s cash position significantly, with the company beginning 2021 with $5 billion in cash, including about $1.6 billion announced Thursday morning. Plug Power and Korea’s SK Group closed a deal first announced on January 6, creating a partnership to accelerate the development of hydrogen as an alternative fuel in Asia. SK Group now owns a stake of about 9.6% in Plug Power.

Plug Power also announced last year a 50/50 joint venture with France’s Groupe Renault that is targeting a 30% share of a European market expected to reach 500,000 fuel cell-powered light vehicles by 2030. The two firms have been cooperating for nearly a year and expect to close the deal formally this summer.

The stock traded down more than 6% Thursday morning to $46.95, in a 52-week range of $2.53 to $75.49. The consensus price target on the stock is $62.89, and daily average trading volume exceeds 40 million shares.