Plug Power Inc (NASDAQ:PLUG) lost its gains yesterday from its announcement of a long-term distribution agreement with Praxair, Inc. (NYSE:PX). Its stock  declined nearly 6% to $5.04 per share at the time of this writing, around 2:20 P.M. in New York today.

Why Plug Power Inc Stock Declined Today?

Agreement details

Based on the terms of the agreement, Praxair, Inc. (NYSE:PX) will supply hydrogen fuel to the GenKey customers of Plug Power Inc (NASDAQ:PLUG) in the United States.

Praxair, Inc. (NYSE:PX) is the largest liquid hydrogen producer in North America. Plug Power’s GenKey is an all-in-one hydrogen fuel cell solution.

Andy Marsh, CEO of Plug Power Inc (NASDAQ:PLUG) said the agreement with Praxair, Inc. (NYSE:PX) allows the company to offer the most reliable and economical hydrogen solution to its customers.

He added that Plug Power’s emergence in the fueling business will simplify the transition to hydrogen fuel cells for material-handling customers.

Plug Power rated Sell

TheStreet Ratings team gave a Sell recommendation for the shares of Plug Power Inc (NASDAQ:PLUG) with a score rating of D citing the reason that the company have multiple weaknesses.

TheStreet Ratings team explained that Plug Power’s weaknesses have greater impact that any of its strengths, making it more difficult for investors to achieve positive results.

According to ratings team noted that Plug Power Inc (NASDAQ:PLUG) has negative operating cash flow of -$11.05 million. They also noted that its growth rate was lower compared with the industry average.

In addition, the ratings team emphasized that the current gross profit margin of the company is extremely low at 3.91%. However, they noted that its net profit margin of 22.38% (despite mixed results of gross profit margin) was significantly higher than the industry.

Furthermore, the ratings team noted that the Plug Power’s debt to equity ratio at 0.02 is lower than industry average. According to them, the company is successful in managing its debt levels and maintaining a quick ratio of 9.50, a sign that it ca cover its needs for cash over the short-term.

They also noted a significant strength within Plug Power Inc (NASDAQ:PLUG) based in its current return on equity, which increased significantly compared with its ROE in the same quarter last year.