It's been kind of a yo-yo day for investors in Plug Power (NASDAQ:PLUG), one of the pioneers in hydrogen fuel cell energy. One day after the company reported Q3 earnings, Plug shares first rushed out of the gate, rising more than 6%...then gave all those gains back...then plunged more than 6%, only to end up where we are right now, at 11:15 a.m. EST, with Plug shares down 2.5%.
So what exactly is going on here?
Plug had both good news and bad news for investors yesterday. On the bad-news front, the company reported a GAAP loss of $0.11 per share and a pro forma loss of $0.04, both numbers apparently short of Wall Street estimates. This was despite sales coming in at $107 million, up 80% year over year.
When calculated according to generally accepted accounting principles (GAAP), Plug's loss grew by an astounding 37%, despite the company's share count exploding 57% higher, spreading its losses out across many more shares. (That is to say, but for all the stock dilution, Plug's per-share losses would have grown much more -- by about 117%, in fact.)
Free cash flow at the company was just abysmal. Over the first three reported quarters of this year, Plug has now burned through $168.2 million in negative FCF -- 3 times its cash burn of one year ago.
On the plus side, though, Plug is sticking to its guns and sticking to its promises to produce $325 million to $330 million in "gross billings" by the end of this year -- up from a prediction of $310 million previously -- and to grow that number to $1.2 billion by 2024, with $200 million in "operating income" besides.
The fact that Plug isn't wavering from that promise, I suspect, is why investors aren't punishing the share price more severely today. It's the fact that current-year earnings are so much worse, meanwhile, that has me afraid of this stock.