Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Plug Power Inc. Popped 16% Today

By Travis Hoium – Mar 10, 2016 at 2:20PM

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

A stronger-than-expected earnings report had investors buying into this hydrogen stock today.

Image source: Plug Power.

What: Shares of hydrogen technology provider Plug Power Inc. (PLUG -2.38%) jumped as much as 16% today after announcing fourth-quarter earnings.

So what: Revenue jumped 78.6% from a year ago to $38.4 million, coming in ahead of the $35.5 million analysts were expecting. GenDrive units recognized in the quarter jumped from 719 a year ago to 1,256.  

On the downside, net loss more than tripled to $25.2 million, or $0.14 per share, partly due to writedowns on service contracts because of faulty products. Adjusting for these one-time items, the company lost $0.05 per share, which is what Wall Street expected.   

Now what: Growth is coming along nicely for Plug Power, but there's still no sign the company is going to turn a profit in the near future. That's what has me concerned today, despite the strong top-line results. Management also recently took out a $30 million loan to help fund future growth. That leaves the company with a strong cash position, but until Plug Power can prove it can generate cash from operations, rather than burn it, I would approach this stock cautiously.

Travis Hoium has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Nearly 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 Stock Quote
Plug Power
$15.58 (-2.38%) $0.38

*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 analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 12/01/2022.

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

Premium Investing Services

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