Shares of Plug Power Inc (NASDAQ: PLUG) were trading higher on Tuesday, after the company reported its second-quarter results.
The company’s overall gross margins approached breakeven levels, driven by strong Material Handling demand for fuel cells and management’s cost reduction initiative, according to BTIG.
The Plug Power Analyst: Analyst Gregory Lewis maintained a Neutral rating on the stock.
The Plug Power Thesis: The company’s Material Handling solutions delivered their strongest quarter since the third quarter of 2023, Lewis said in the note.
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Plug Power’s revenue of around $178 million topped consensus by about 5%, with lower-than-expected Equipment revenues being offset by higher sales across the rest of the business, he added.
“Equipment margins turned positive in Q2, driving overall margins near breakeven levels,” the analyst wrote.
He noted that management generated liquidity through:
- The sale of the Graham, Texas project last month for around $77 million, although up to $27 million depends on when the project receives its final interconnection agreement from the local utility.
- The sale of around $44 million worth of ITCs (investment tax credits) related to its Louisiana hydrogen plant.
- The plan also includes the release of around $50 million of restricted cash per quarter and continued effort to mitigate cash burn.
“Looking ahead, Material Handling continues to be a bright spot with management noting two of its largest customers are entering a replacement cycle for ~20k fuel cells over the next three years,” Lewis said.
Driven by visibility into equipment sales, management raised its full-year revenue growth guidance to 15%-16%, up around 150 basis points (bps) at the midpoint, while reaffirming its target of reaching positive EBITDA in the fourth quarter, the analyst added.
PLUG Stock Price Activity: Plug Power shares were up 4.27% at $2.20 on Tuesday, according to Benzinga Pro data.
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