Plug Power (PLUG  ) shares are moving higher following the company restating 2020 earnings. In many ways, Plug Power is the poster child of this bull market. Last year, it was one of the best-performing stocks in the market with a 2,880% gain from its March lows to its high in January. This came about as growth stocks outperformed, specifically EV stocks as investors became enamored with the sector's growth potential.

And, this year, it's been one of the worst-performing stocks in the market as it is down by 59% from its high, and this is after Plug Power's stock rallying 35% in the last couple of weeks. Of course, this year has featured a rotation out of growth stocks amid rising long-term rates and accelerating economic growth.

Plug manufactures hydrogen fuel cells for forklifts and has captured a meaningful share of the market. Many investors believe the company's fuel cell technology will be able to be used in different industries such as commercial transportation and backup power sources for data centers that have much more potential than the forklift market.

Updated Outlook

However, the company added to its challenges when it identified an "accounting error" that would delay its Q1 earnings and lead to a restatement of its 2020 results. The crux of the issue was that Plug Power had issued warrants to some of its customers, and these warrants were exercised as the stock soared higher last year.

As a result, the company incurred $456 million in costs, and it had a surprise loss of $1.12 per share, while analysts were expecting a loss of $0.08 per share. Revenue was negative $316.3 million. According to the company, all customer warrants have now been exercised.

2020 revenue was restated to negative $93.2 million with small adjustments to 2018 and 2019 revenue. 2020 Loss increased to $1.68 per share from $1.58 previously. CEO Andy Marsh said that these adjustments are non-cash and will have no impact on operations.

Although official Q1 figures haven't been released, the company did reiterate its guidance for $70 million in gross billings and $67 million in net revenue. It expects $105 million in Q2 gross billings as well as $475 million for the full year, $750 million in 2022, and $1.7 billion in 2024.

Outlook

Even with Plug's stock losing more than half of its value, it remains overvalued by traditional metrics. Buying the stock is essentially a vote of confidence that management will be able to execute its vision. The company has a big opportunity especially since the fuel cell market is expected to grow bigger than $200 billion over the next decade. However, this type of accounting error can undermine investors' confidence in the management.

Given this factor and the continued headwind for growth stocks, investors shouldn't chase this bounce.