Plug Power (PLUG) Stock: Here’s Why It’s Climbing
Joshua Rodriguez | Mar 10, 2016 10:07AM ET
As mentioned above, Plug Power (NASDAQ:PLUG) reported its earnings for the most recent quarter before the opening bell today. The positive results led to investor excitement and pre-market gains on the stock. Here's what we saw from the report...
- Earnings Per Share – In terms of earnings per share, the company did relatively well. In the quarter, analysts expected that PLUG would generate a loss in the amount of $0.05 per share. The company reported a loss of $0.05 per share, right in line with analyst expectations.
- Revenue – While earnings were right on point, the company excited investors with regard to revenue. In the quarter, analysts expected that PLUG would generate revenue in the amount of $36.18 million. However, the company actually generated revenue in the amount of $38.4 million, well ahead of what analysts expected to see.
As you can see from the data above, the earnings release from Plug Power was relatively positive. Not only were the numbers pretty good, comments from PLUG CEO, Andy Marsh were definitely encouraging. Here's what he had to say...
h3 How The Market Reacted To The News/h3“Customer Adoption continues to accelerate with both new customers and follow-on sales to existing customers, and our margin expansion initiatives have exceeded our expectations as we drive towards overall profitability...”
As investors, we've learned that any time there is news about a publicly traded company, we can expect for the value of the stock associated with that company to move. Positive news will lead to positive moves and negative news will lead to negative moves. Also, there are few pieces of news that have the ability to move the market quite like earnings. So naturally, with a strong earnings report in focus, PLUG is having a strong start to the day in the market. Currently (9:14), PLUG is trading at $2.10 per share after a gain of $0.20 per share or 10.53% thus far today.
h3 What We Can Expect To See Moving Forward/h3Moving forward, I have a relatively mixed opinion of what we can expect to see from Plug Power. In the short term, we're likely to see more positive moves as investor excitement fuels growth. However, excitement is an emotion and emotions are short-term. In the long run, there's still quite a bit that worries me about the company. Given the current energy sector landscape, I don't see PLUG becoming profitable on an overall sense any time soon. The company has incredibly weak operating cash flow, and while it is working to expand margins, the margins are still very thin, which will likely lead to further issues for PLUG. All in all, in the long-term, I'm expecting to see relatively negative movement.
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