Extending a slide that saw shares plummet more than 22% in October, Plug Power (PLUG 1.26%) stock sank 31.5% last month, according to data from S&P Global Market Intelligence.

In addition to the company's reporting of disappointing third-quarter 2023 financial results, investors clicked the sell button upon learning that management is dubious about the company's ability to remain in good financial standing. A flurry of downwardly revised price targets further gave investors a reason to cast their shares out of their portfolios.

Management quietly raised a major red flag for this company's future

Reporting sales of $198.7 million and a $0.47 loss per share, Plug Power came up short of analysts' expectations that the company would report $238.9 million on the top line and a narrower loss per share of $0.30. Undoubtedly, this contributed to some of the stock's sell-off, as investors are frequently spooked when companies fail to meet analysts' estimates. But smart investors know that singularly focusing on the headline figures is hardly a sound investing strategy. When they dug deeper, therefore, and found that management questions the company's "ability to continue as a going concern," they sounded the alarm. The company's lack of confidence that it will be able to pay its bills -- the going concern -- is hardly reassuring.

Unsurprisingly, several analysts turned sour on Plug Power stock, contributing to the stock's tumble.

  • UBS cut its price target to $5 from $15.50.
  • Wells Fargo reduced its price target to $4 from $7.
  • Morgan Stanley slashed its price target to $3.50 from $9.

Picking up Plug Power stock is more perilous than ever

A leader in fuel cells, Plug Power has long promised that its time was coming, and many investors believed it. Having faith that the company's success in growing the top line would translate to bottom-line growth, investors bullish on the future of fuel cells and hydrogen solutions bid the stock considerably higher.

Those, however, who didn't take management at its word -- those who recognized the company's constant inability to make substantial progress toward profitability -- kept the stock at arm's length. And it's these investors who are feeling vindicated after the company reported its doubt about its ability to maintain its financial obligations. This is a devastating development for the company, and investors who remain bullish on the company's ability to weather this storm and emerge victorious should absolutely wait for the company to stand on a firmer financial footing before choosing to pick up shares.