Plug Power Down Over 37%, Issues Going Concern Warning — 4 Analysts Slash Stock Outlooks

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Shares of Plug Power Inc (NASDAQ: PLUG) plummeted over 30% in the pre-market Friday. The Lathan, New York-based company reported disappointing third-quarter results and issued a going concern warning.

Plug has been betting on the hydrogen economy. However, "unprecedented supply challenges" in the hydrogen network in North America have impacted the company's financial performance.

Here are some key analyst takeaways:

  • Oppenheimer analyst Colin Rusch downgraded Plug Power stock to Perform on lower growth, with removing their price target of $21.
  • Truist Securities analyst Jordan Levy maintains Hold while decreasing the price target from $8 to $6.
  • RBC Capital Markets analyst Chris Dendrinos moved his rating to Sector Perform, Speculative Risk while lowering the price target from $12 to $5.
  • BMO Capital Markets analyst Ameet Thakkar maintains Market Perform rating with a reduced price target of $3.75.
Oppenheimer: Colin recognizes the impact of hydrogen shortages and significant inventories build-up on the firm. Q3 gross margins were impacted by hydrogen supply shortages and new business ramps

"We see forklifts as a multi-year growth opportunity that supports valuation upside, and believe PLUG can expand into over-the-road vehicles given its leadership in fuel cell integration for motive applications. For now, the shares will likely be challenged until working capital normalizes, GM turns positive, and trajectory on growth is derisked," the note said.

Truist Securities: Levy's note highlights the challenge of scaling hydrogen infrastructure without hydrogen, for Plug Power.

Truist analysts "see headwinds," citing a backdrop of interest rate risk and global supply chain risk.

RBC Capital Markets: Dendrinos sees limited visibility as well as margin pressure as key issues with Plug Power.

"Management expressed confidence in executing a liquidity transaction near-term and continues to see a path for margin improvement through next year," he said, regarding Q3 earnings. "However, at this time we think it prudent to move to the sidelines and await execution of these events and until we see more material progress on initiatives to reduce the cash burn and improve margins."

BMO Capital Markets: Thakkar cited the big cash flow hole and the going concern risk as key reasons for his bearishness.

"PLUG's balance sheet was under stress and the company had a need for external financing," the note said. "Concerns ratcheted up significantly with new disclosure in 3Q 10-Q regarding going concern risk."

BMO, however, sees a potential for reset if financing plan is announced.

PLUG Price Action: Shares of Plug Power were down 37.86% to $3.68 at the time of publication Friday.