Please ensure Javascript is enabled for purposes of website accessibility
Free Article Join Over 1 Million Premium Members And Get More In-Depth Stock Guidance and Research

Hold on Tight, Plug Power Investors: This Roller Coaster's Not Done Yet

By Mark Reeth and Simon Erickson - Mar 12, 2014 at 7:15PM

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

Plug Power investors had better have an incredibly strong stomach.

The stomach-churning, roller-coaster ride for Plug Power ( PLUG 6.96% ) continues this week, with the stock rebounding more than 15% today after crashing hard on an analyst's research report yesterday that called for the stock to implode entirely once the hype dies down.

On Tuesday's edition of "Stock of the Day", host Mark Reeth and Motley Fool analyst Simon Erickson discussed the incredible ride Plug Power has had so far. Simon tries to look through the exuberance and notes that while this is a disruptive new technology that has attracted some big-name clients so far, he still views it ultimately as a manufacturing company, which needs to pitch, manufacture, and ship each and every sale. While the market may be hoping for the next Tesla Motors with this stock as excitement over electric vehicles continues at a fever pitch, the price here may have become entirely disconnected from any reasonable valuation.

Simon also points to the fact that the share count has tripled in the past three years, prior to the stock's jaw-dropping 3,500% gain over the past year. Simon's pretty convinced that the capital-intensive nature of the business will mean more share dilution down the road, and says that with the company still in the negative on its gross margin line, he definitely doesn't like this stock today.

)
This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Plug Power Inc. Stock Quote
Plug Power Inc.
PLUG
$36.42 (6.96%) $2.37

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

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
633%
 
S&P 500 Returns
140%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/07/2021.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Our Most Popular Articles

Premium Investing Services

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