Hydrogen fuel cell specialist Plug Power (NASDAQ:PLUG) is set to release its fiscal first-quarter earnings report prior to the opening bell on May 9. Analysts anticipate a revenue bump from the company’s multiple deals. However, downward revisions for earnings per share pose concerns for PLUG stock, which has slipped 5% ahead of the critical disclosure.
Overall, Wall Street is looking for a loss per share of 33 cents on revenue of $157.58 million. In the year-ago quarter, the company posted a loss of 35 cents on sales of $210.29 million. Prior to the Q1 2023 disclosure, analysts anticipated a loss of 27 cents on revenue of $205.49 million.
A much more difficult framework may await PLUG stock for this year’s Q1 report. Per Seeking Alpha, over the past 90 days, analysts revised their EPS estimates upward one time and downward six times. On the top line, analysts revised their estimates upward two times and downward 12 times.
Breaking Down PLUG Stock Ahead of Earnings
According to Zacks Equity Research, “[r]evenues from fuel delivered to customers and related equipment are expected to have benefited from an increase in the number of sites with fuel contracts.” Experts believe that net revenue for fuel deliveries to customers will land at $18.1 million. If so, that would represent a 79.2% increase year-over-year.
Further, Power Purchase Agreements (PPA) sales may rise to $15.4 million (up 94.9% YOY) due to an increase in average unit numbers and customer sites. Zacks also points out that PLUG stock may see a boost from the underlying company’s acquisitions of Applied Cryo Technologies and Frames Group. Both these enterprises have strengthened Plug’s “green hydrogen ecosystem and enhanced its capabilities to deliver a range of turnkey electrolyzer solutions.”
PLUG stock stakeholders may also find reassurance in the underlying robust product portfolio. The GenFuel, GenSure and ProGen product lines are included in the holdings. Combined with Plug’s expansionary initiatives and global footprint through strategic partnerships, the bulls have reason for optimism.
Skepticism Still Clouds the Narrative
Despite the positives, Zacks acknowledges that PLUG stock suffers from “a bleak earnings surprise history.” The fuel cell specialist missed bottom-line consensus targets in each of the past four quarters.
In the Q1 disclosure, investors will likely be focusing on the cost of sales and operating expenses, which have clouded PLUG stock for an extended period. Further, high labor and raw material costs may have negatively impacted the company’s margins and profitability.
Moreover, Plug’s global expansion doesn’t come without consequences. Zacks notes that “risks arising from unfavorable movements in foreign currencies and geopolitical issues are likely to have hurt Plug Power’s performance.”
Even the top line isn’t exempt from criticism. Zacks states that “a decline in revenues related to fuel cell systems owing to the lower volume of GenDrive units sold is expected to have hurt revenues from sales of equipment, related infrastructure and others.”
Should You Buy PLUG Stock?
Currently, the consensus for PLUG stock sits as a hold, breaking down as eight buys, 12 holds and four sells. The average price target stands at $5.28, implying an almost 109% upside. That’s of little comfort for those who lost 45% of value since the beginning of the year.
Ultimately, the question of acquiring PLUG stock may come down to what the insiders are doing. Here, Gurufocus notes a glaring contrast. Over the past three years, no insider bought shares, with the transactional volume all pointing to insider sells.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
