Why Plug Power Stock Jumped This Week, but Dropped Friday Morning

Plug Power (PLUG 1.26%) stock was having a banner week, at least through Thursday. The stock had soared by more than 20% heading into the company's fourth-quarter earnings report Friday morning. But shares plunged after the market got a look at that report.

Still, as of late Friday morning, Plug Power stock was trading about 6% higher than where it started the week, according to data provided by S&P Global Market Intelligence. There was some good news in the company's earnings report, but investors still decided to sell the news.

No longer worried about remaining a "going concern"

Perhaps the best news from the company was a change from what it said in its last quarterly report.

In its third-quarter report, management stated, "[W]e continue to incur losses and might never achieve or maintain profitability." At that time, it officially issued a "going concern" warning to let investors know there was a chance that it would not survive as a business.

But on Friday, the company said it "has concluded that there is no longer substantial doubt of the company's ability to continue as a going concern." In a previous business update, CEO Andy Marsh told investors that although Plug Power had already reached an agreement with an investor to potentially issue another $1 billion worth of shares to raise capital, that might not be necessary.

For the full year, Plug Power's revenue grew by 27% to $891 million, a record for the company. It's now generating more revenue from green hydrogen production plants that have begun operations.

Focus on financials

CEO Marsh is also saying the right things. "Recognizing the past challenges with cash management, we are dedicated in 2024 to bolstering our financial profile," he said. But 2023 revenue did miss the analysts' consensus estimate of over $915 million.

After the stock's sharp rise in the lead-up to Friday's report, many investors decided to take profits. That's understandable, as it's still too soon to know if Plug Power will make it to profitability without having to raise more capital.