Why Shares of Plug Power Inc. Popped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Plug Power  (NASDAQ: PLUG  ) jumped as much as 25% today after the fuel cell company reported earnings.

So what: Fourth-quarter revenue jumped 36% to $8 million, while net loss was $28.9 million, or $0.28 per share. Excluding one-time items, the loss was $8 million, or $0.08 per share, in line with estimates.

Now what: What's probably more important than last quarter's results were the insights given into the company's recent orders. Fourth-quarter bookings landed at $62 million; the company has already booked more than $60 million so far in 2014 and hopes to hit $150 million for the full year. This puts the FedEx and Wal-Mart deals that caused the stock to pop into some perspective.

The future of Plug Power depends on how fast the company can get new customers to adopt its product, as the market is already pricing in that growth. I'm less worried about the loss today than I am about Plug orders reaching that $150 million figure and growing again next year.

Plug Power could live up to its current stock price, but it'll take continued growth -- and that's the risk in shares right now. Growth is already priced in and any miss in the company's future could sink the stock. Investors just need to be aware of the risk versus the reward in Plug's strategy.

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