Plug Power Inc (NASDAQ:PLUG) stock continued to climb today after last week’s news about the deal with Golden State Foods. The company ordered GenDrive fuel cells for 39 of the vehicles used in its warehouses. Management has said previously that they expect orders to triple this year and become profitable for the first time in 15 years.
Plug Power volume goes through the roof
As of this writing, more than 13.1 million shares of Plug Power had already changed hands. The daily average volume is only 7.1 million shares. In a post on The Street, Trade-Ideas LLC identified the company as being “strong on high relative volume.”
The firm states that the company’s average daily share volume is $25.2 million. As of that post, Plug Power stock was trading at more than eight times the usual volume for that time of day. Also shares set a new high 7% above the previous trading day’s close.
Plug Power to report earnings Nov. 12
When Plug Power releases the earnings results from its third quarter, analysts are still expecting the number to be in the red. They’re looking for losses of 3 cents per share on $24.4 million in revenue.
Analysts at The Street have a Sell rating on Plug Power and a D grade. They see a number of weaknesses in the hydrogen fuel cell maker, and they think those weaknesses outweigh the company’s strengths.
For one thing, they note that Plug Power’s net operating cash flow is down to -$11.05 million, a decline of nearly 121% year over year. Additionally, the company has a very low gross margin at less than 4%, although it has significantly improved year over year, and the net margin of about 22% is significantly ahead of the rest of the industry.
And then there’s the huge issue of share price valuation. Shares have climbed by more than 636% in the last year. That presents a huge risk for investors because they don’t see any upside potential even though the stock has been on a tear of late.