Why Shares of Plug Power Inc Are Supercharged 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 fuel cell product maker Plug Power  (NASDAQ: PLUG  ) jumped as much as 16.7% this morning after presenting guidance for 2014 at a conference.

So what: Management said it will ship over 3,000 units to 20 manufacturing and distribution sites this year and generate $70 million in revenue. They also see 25% gross margin this year and expect to break even on an EBITDA basis before the end of the year.  

Now what: The growth isn't a huge surprise, but it still exceeds the $65 million estimate analysts had put for the company. But keep in mind that even $70 million in revenue means that Plug Power is trading at 9 times revenue, a huge multiple even for a growth stock. It's that multiple and the fact that Plug Power still isn't profitable that will keep me out of the stock until I see even more bottom-line progress.

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Read/Post Comments (6) | Recommend This Article (3)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 13, 2014, at 3:03 PM, amelton3 wrote:

    The stock is supercharged because the company's earning potential is higher than it's ever been.

  • Report this Comment On May 13, 2014, at 4:04 PM, JoeD wrote:

    Travis, such a lot of time placed on following Plug. You must get a lot of subscribers which I sure is the intent of following high volume traded stocks like Plug. Either that or you get to sell a lot of advertising who rates much be priced on number of hits. Your advice is consistent with your market savvy and strategy and I'd be interested in your record. Also, it would be nice if you let us know what the investor or investors did with the stock they purchased through the latest stock offering by Plug and the sale of which was led by Morgan Stanley and Barclays. Did they short or sell that stock. Those that bought such a large amount of shares must not have gotten your advice in time to make a sound judgement not to buy into PLUG. Please do an article on that sale.

  • Report this Comment On May 13, 2014, at 4:18 PM, afoolnolonger wrote:

    I have followed Plug and have owned the stock for many years. Over that period many so called experts have made comments which affected the stock price and many times their comments were completely wrong and some times distorted the facts.

    The Mootly Fool service seems to have daily comments which state obvious facts with a negative slant and then suggest they have a better investment stock which you can obtain by subscribing to their service.

    In my experience as a former subscriber they are always trying to sell you a more advanced service at an additional cost.

  • Report this Comment On May 13, 2014, at 4:41 PM, amelton3 wrote:

    Joe,

    It's pretty obvious they bought the stock just to short it. However, tomorrows earnings will reflect new sales opportunities and increased earning potential based on the new residual income.

  • Report this Comment On May 13, 2014, at 5:25 PM, TSIF wrote:

    Four disagreeing comments and not one can give any financial metrics to suggest why Travis's comments that a break even for the year equity is more than fairly accounted for at this price. A net negative book value, issuing $20M in stock three years in a row is why this was $0.22 at the start o of they year.

    YES, of course a company can improve metrics and deserves a fresh look, but those who paid $10 per share on volume induced day traders, short covering and speculators really have some strong conviction bias.

    The tech/social media/biopharm balloon popping on the nasdaq should show investors that you can only forward price so far.

    No, not sure a share, never have been, just find it amusing when the conviction bias side, with ZERO real valuation metrics jump in.

    (PS. Fool doesn't short stocks. Can't defend their articles and advertising, but if an article such as this one causes the share price to fall, it wasn't stable anyways, so more conviction bias, you try shifting the blame for your overpaying on someone else.....)

  • Report this Comment On May 14, 2014, at 12:49 PM, LBMac wrote:

    I recently bought PLUG at $10.09 per share. What a joke! I've lost over half of that investment and waiting for it to climb. It's a great company, but, my timing was TERRIBLE. Look before you leap!!!!!

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