Plug Power -11.4% in early trading Thursday despite reporting better than expected Q2 revenues, as investors apparently are frustrated by the company’s continued delays in project timetables.
Timetables seem to have slipped by about six months, observes Al Root at Barrons; Plug (PLUG) now expects plants in Louisiana, New York, and Texas to achieve full production in 2024, after previous guidance for Louisiana was for late 2023, and the two others had been expected to ramp up in H1 2024.
As a result, even as Plug (PLUG) expects to have positive gross margin in Q4, TD Cowen analyst Jeffrey Osborne said the company likely will not achieve prior gross profit guidance in FY 2023.
While Plug (PLUG) reiterated its full-year revenue guidance range, Morgan Stanley analyst Andrew Percoco said the ongoing project delays could be a near-term impediment to its path to profitability, which likely would result in external funding needs regardless of the Department of Energy loan outcome.
Jefferies analyst Sam Burwell said the company’s negative gross margin of 30% was worse than his own 14% assumption and the 9% he said was implied by consensus expectations.
Roth MKM’s Craig Irwin downgraded Plug (PLUG) to Neutral from Buy with a $7.50 price target, cut from $13, saying Q2’s gross margin challenges are unlikely to resolve quickly and point to materially higher cash plant commissioning costs than previously considered, adding that $1.6B of cash burn in the past year makes the company’s revenue progress less impressive.