Plug Power dives as the company says it will restate financial reports

Plug Power
A Plug Power forklift system.

  • Plug Power dropped by 15% Wednesday after the company said it will file financial restatements.
  • The restatements will cover fiscal years 2018 and 2019 and quarterly filings for 2019 and 2020.
  • The hydrogen-fuel cell company said there were accounting errors related to non-cash items.
  • See more stories on Insider’s business page.

Plug Power shares sharply dropped Wednesday after the hydrogen fuel-cell company said it will restate some of its financial reports because of accounting errors.

The company said the restatements will cover the fiscal years 2018 and 2019 and quarterly filings for 2019 and 2020. The errors related to several non-cash items including the reported book value of right-of-use assets.

Plug Power shares closed down by 7.9% at $39.33 after earlier sliding by as much as 20%. The stock in 2021 has bulked up by 16% and has advanced from about $3.30 over the past 12 months.

The company said it doesn’t expect the revisions to impact its cash position or business operations but will change how it accounts for certain transactions and items.

“The accounting related to the restatement is complex and technical and involves significant judgments in how to apply U.S. [Generally Accepted Accounting Principles], given the innovative nature of the company’s business,” in a “new and rapidly developing industry,” Plug Power said in a press release.

The company said it had discussed its fourth-quarter 2020 and preliminary year-end results with its audit committee and its auditor KMPG before their release “and at that time, no material issues were raised.” But after the release, it said that it and KPMG identified the need for restatements.

Plug Power said it will file its Form 10-K for 2020 as soon as possible as it was unable to make the March 16 deadline.

It also expects to reach its previously stated gross billings targets of $475 million in 2021, $750 million in 2022 and $1.7 billion in 2024.

Read the original article on Business Insider

FuelCell Energy drops 7% on disappointing 4th quarter earnings

FuelCell Energy.
FuelCell Energy.

  • FuelCell Energy stock dropped over 7% Thursday after a lackluster fourth quarter earnings report.
  • The company posted a 17% revenue increase on a full-year basis, but it still trades at 34x sales.
  • JPMorgan warned the valuation of FuelCell may be overheated in a note earlier this month.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

FuelCell Energy stock dropped over 7% on Thursday after delivering a lackluster performance in the fourth quarter.

Analyst forecasts had predicted a $0.04 loss per share on revenue of $17.05 million for FuelCell. The company missed those estimates, notching an $0.08 loss per share on revenues of $17 million.

FuelCell also posted a net loss of $18.9 million in the quarter, although that is an improvement from the company’s $35.2 million net loss from the year-ago quarter.

On a full-year basis, FuelCell Energy’s revenue did rise some 17%, but many investors will be looking for more as the company is currently priced at around 34x sales.

Read more: We spoke to crypto platform Gemini, which is backed by the Winklevoss twins, about Bitcoin, how to use stable coins and why regulation won’t kill the boom in digital currencies

FuelCell stock surged at the start of 2021, jumping by about 96% until its January 13 intraday highs of almost $21 per share.

Since then, however, the stock has fallen back down to around $16 per share after a report from JPMorgan questioned the current valuation and assigned a $10 price target for the shares.

The disappointing showing from FuelCell is another bump in the road for hydrogen fuel cell makers of late. Rival fuel cell maker Plug Power saw its shares plunge 7% on Wednesday after Kerrisdale Capital announced a short position and called the hydrogen economy a “fool cell” future.

And on Wednesday, Credit Suisse downgraded another hydrogen rival ,Bloom Energy, to neutral from outperform, sending the stock down over 3%.

Still, FuelCell remained upbeat in their most recent earnings report, noting the benefits of a new, more green-focused, presidential administration.

“Based on the initial policy objectives outlined by the incoming White House administration, we expect clean energy and climate policies in the U.S. to begin to match the pace of advancement seen in other markets such as Europe and Asia, and to be favorable toward the development of the growing hydrogen economy,” said Jason Few President and CEO of FuelCell Energy.

Few also noted FuelCell is in a better position financially after recent capital raises allowed the company to “retire high-cost debt.”

Shares of FuelCell traded at $15.88 on Thursday morning putting the company’s market cap at around $5 billion.

Read the original article on Business Insider

Plug Power falls 7% after JPMorgan calls the company ‘fully-valued,’ issues price target below current level

Shell Hydrogen charging point 2019
  • Plug Power fell 7% on Thursday after JPMorgan initiated the hydrogen fuel-cell manufacturer at “neutral” with a $60 price target, representing potential downside of 14% from Wednesdays close.
  • Despite the downside price target, JPMorgan believes Plug Power is a first-mover in what represents a “massive market opportunity” that could be worth $200 billion.
  • Plug Power is “fully-valued but a must own in the hydrogen space,” JPMorgan said.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell

Plug Power fell as much as 7% on Thursday after JPMorgan said the hydrogen fuel-cell leader is “fully-valued but a must own in the hydrogen space.”

JPMorgan initiated Plug Power at a “neutral” rating with a $60 price target, representing downside potential of 14% from Wednesday’s close. The price target is based on a discounted 2024 market cap derived from a 60-times enterprise value-to-2025 EBITDA forecast of $534 million. 

Shares of Plug Power have been on a tear in recent months, and year-to-date Plug Power is up 105% as of Wednesday’s close.

Plug Power is a first-mover in the hydrogen space, having developed proven proton exchange membrane technology that powers logistic vehicles for first-rate customers like Walmart and Amazon. The company is capitalizing on what could be a $200 billion total addressable market, JPMorgan said.

Plug Power has a strong balance sheet and planned production scale to capitalize on that opportunity, the note said.

Read more: Cathie Wood’s ARK Invest runs 5 active ETFs that more than doubled in 2020. She and her analysts share their 2021 outlooks on the economy, bitcoin, and Tesla.

JPMorgan expects the New York-based company to see a 40% compounded annual growth rate that generates $1.2 billion of gross billings by 2024.

The three big growth opportunities for Plug Power are: 1) expansion of the existing materials-handling franchise, 2) expansion into new markets and verticals including Europe, electric vehicles, and data-center backup power, and 3) green hydrogen, JPMorgan explained.

And a recent partnership between Plug Power and Renault to jointly develop hydrogen-powered electric vehicles could “produce 40% upside to the 2024 revenue target, pushing revenues to $1.7 billion, and cause growth to accelerate in 2025,” JPMorgan said. 

Revenue in 2025 could exceed $2 billion if Plug Power manages to successfully execute on its growth strategy, JPMorgan said, adding that it thinks this “justifies the very high multiples at which the stock trades.”

Read more: BANK OF AMERICA: Buy these 10 Dow stocks to take advantage of rich dividends and a long-term strategy primed for a comeback in 2021

Read the original article on Business Insider