Please ensure Javascript is enabled for purposes of website accessibility

Why Plug Power Jumped 10% Friday Morning, but Then Retreated

By Howard Smith – Aug 6, 2021 at 4:05PM

Key Points

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company raised guidance in its quarterly financial report, but it wasn't all good news.

What happened

Hydrogen fuel cell company Plug Power (PLUG -3.05%) reported its second-quarter 2021 financial report after the bell Thursday, and investors gave the stock an early boost today. Its shares popped 10% early Friday, but by the afternoon the stock gave back most of those gains. 

So what

Plug reported that compared to the year-ago period, net revenue increased 83% in its second quarter ended June 30. The company said in its press release that robust activity and strong bookings are "setting the stage for substantial growth in 2022." As a result, the company said in its conference call with investors, it raised estimates for the full year 2021 for gross billings to $500 million, a 50% jump over 2020. Previously the company estimated 2021 gross billings -- which do not include incentives given to customers in the form of warrants -- to be $475 million. So why didn't the move in the stock hold today? 

Plug Power hydrogen tanker truck.

Image source: Plug Power.

Now what

Well, Plug continues to lose money, with a net loss of $99.6 million for the quarter, and $160.4 million for the first half of the year. And though net revenue increased 83%, its cost of revenue jumped 142%. 

The company does have several projects ongoing, and it expects to reap rewards as they progress. It launched a joint venture in France during the second quarter, hoping to supply hydrogen-fuel-cell-powered light commercial vehicles and build out associated hydrogen fuel infrastructure in Europe. The venture is aiming to achieve 30% market share for hydrogen-powered light commercial vehicles in Europe by 2030. It is also working to build out a green hydrogen production network in the U.S. and recently announced a strategic agreement with BAE Systems for hydrogen-powered buses. 

Until the company begins to show results from its projects, investors are likely to remain somewhat hesitant, which explains today's stock action. Plug Power seems to have become a "show-me" stock, and that's probably the right approach based on its past results. 

Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Stocks Mentioned

Plug Power Stock Quote
Plug Power
PLUG
$13.36 (-3.05%) $0.42

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.