Why Plug Power Stock Nosedived This Week
Shares of Plug Power (NASDAQ: PLUG) sank this week, shedding 25% of its value through 11 a.m. ET Friday according to data provided by S&P Global Market Intelligence. With this week's drop, the hydrogen stock has already given up almost all of its gains from July. Blame yet another set of dismal numbers and analyst downgrades. Will Plug Power stock revive again?
Plug Power announced second-quarter earnings results on Aug. 9. The company generated record quarterly sales of $260 million during the quarter, up 72% year over year. Demand for its fuel cell systems and equipment remains strong, and Plug Power also installed several hydrogen sites during the quarter. The company also expects 2023 revenue to grow by 70% to 100%. The problem is profits.
All those incremental sales simply can't seem to flow through to Plug Power's bottom line because of high costs. In fact, Plug Power's losses widened significantly last quarter, with its gross margin coming in at a negative 30%. The company also used up a lot more cash even as its losses continue to mount. Unfortunately, this same story has played out for several quarters -- even years -- now. Investors, therefore, are right to be miffed, and it's no surprise that they dumped the stock after its numbers came out.
Source Fool.com
