#$plug

By Nam Hyun-woo SK Group will form a hydrogen business partnership with Geely Auto Group of China, which is thought to be related to projects for fuel-cell electric vehicles (FCEVs) using the gas, according to industry officials, Monday. SK Holdings, the group's holding and investment company, said it was "in talks with Geely over a partnership in various businesses."

https://img.koreatimes.co.kr/upload/newsV2/images/202101/c3fbc03de5344f07bc4722ae8455e000.jpg/dims/resize/740/optimize 

Workhorse Group: Crony Capitalism at its Worst, Market Manipulation at its Best..

(Bloomberg, June 19, 2020) “Formidable added that Workhorse’s investment in electric pickup-truck maker Lordstown Motors Corp. is the “kicker.” The 10% stake could be worth over $1 billion even if the market views Lordstown as only half as valuable as Nikola, the fund said.”

…The key take-away seems to be that Lordstown Motors, a random company started by the former CEO of Workhorse…

On 4/4/17 Plug Power ($PLUG) announced that it reached an agreement with Amazon ($AMZN) to utilize Plug Power fuel cells and hydrogen technology in its fulfillment network (LINK). Amazon was granted warrants to acquire up to 55,286,696 shares of Plug Power shares at $1.189. Under those terms, Amazon must spend at least $600 million over the life of its contract with Plug Power to take full advantage of that deal.Amazon and Plug Power will also begin further developing Plug's technology together, including expanding the applications for Plug Power's line of ProGen fuel cell engines.

Amazon has done similar deals over the last year with two air delivery companies ($AAWW, $ATSG) and T-shirt company ($KRNT).  $AAWW, $ASTG were big winners for us, we wrote about them here TWO AMAZON DERIVATIVE PLAYS. I think today is a good day to mention the Plug Power/Amazon deal after Amazon announced that it will buy Whole Foods.

Frank Zorrilla, Registered Advisor In New York. If you need a second opinion, suggestions, and or feedback in regards to the market feel free to reach me at [email protected] or 646-480-7463.

Fundamentals

Plug Power (PLUG) is a fascinating company with a fascinating history and a rather fascinating CEO. PLUG is in the fuel systems and storage business. It hit the mainstream news rounds when the stock rose literally from pennies to about $12 in stock price. Since then, the stock has fallen back down over 80%. The run up was a bit of bad money chasing overblown momentum, but the fundamentals surrounding the firm did drastically change for the better. All of a sudden the company is signing multi-million dollar contracts and to date, those contracts have come in. Either you believe the growth story and ignore the rest of the fundamentals, or you ignore the growth story and believe the current fundamentals. But, let's start with some facts. This is a 16-year chart of PLUG's revenue (TTM).

We can see revenue is up more than 100% year-over-year. We know that its GenDrive product saw shipments more than double in the prior quarter and the company said that it would unambiguously drive the company to record revenue. GenDrive sales hit 888 units, up from 419 in the first quarter, and even more impressive, the company re-asserted its guidance that 3,300 GenDrive units would be delivered in 2015 along with 15 genFuel systems (Source: The Motley Fool). Those sales altogether are expected to drive $200 million in revenue. As a point of reference, in the trailing twelve months (TTM), PLUG has generated $75 million in revenue which itself is up from just $25 million for the year ending March 2014. More good news, the stock gapped up hard on Monday, rising nearly 15% on speculation that Home Depot would become a multi-hundred million dollar customer (or more). On Friday, September 18th, a new distribution facility for Home Depot opened that will include 172 Plug Power GenDrive fuel cells and fueling infrastructure. Now, this firm has $75 million in revenue in the last year, so speculation of even a one hundred million dollar new customer would be enormous, let alone multi-hundred million dollars. But, there's another side to the story, and that's why the stock "only" rose 15%. Back in 2014, Walmart (WMT) announced it would buy 1,700 units from PLUG and speculation swirled (just like with Home Depot) that all of a sudden Wal-Mart was going to switch to hydrogen-powered forklifts. That has come to fruition with a couple of WMT stores coming on line every quarter, but still, the stock is down 50% from the date of that announcement. It was not a game changer. Here's a solid start thought -- this image is form hydrogen.energy.gov.

There are a few misconceptions about his firm that I think need to be cleared up. First, this is not a new firm, it has been public for more than 15-years, it's simply "newly interesting." Also, regardless of the low stock price, its market cap as of this writing is over $390 million. If we look at the net income (after tax profit) for the last 16 years, we can see the company has never turned a profit over any twelve-month period.

Further, the company has been selling stock to fund operations as levered free cash flow over the trailing-twelve-months is also negative. This is not a micro cap. For a company with no profit, no expected profit and sales below $100 million (right now), we can't just blindly say it's undervalued. But, there is an argument that it will be undervalued if it delivers on what appears to be continued promising news and continued large customer signings. There is also an argument that it's overvalued; and here it is: While the company has been exploding revenue with new orders, it simply is not turning a profit and is really nowhere near it. In fact, in the latest quarter, the firm generated just $0.71 in operating revenue for every $1 in expense. That's atrocious, even for a growing firm. Further, and perhaps more damning, there is yet to be strong evidence that PLUG has created a competitive advantage, or more plainly, a differentiated product. In fact, in a Motley Fool article authored by Travis Hoium, we read:

"Remember that GenDrive is essentially retrofit into existing manufacturers' products, so Plug Power could easily be shut out of the industry's growth potential if manufacturers like Raymond decide to make a hydrogen product themselves. [] Plug Power hasn't shown the ability to make money and doesn't have a product with a competitive advantage in the market." Source (The Motley Fool ).

That's the bearish argument to balance the scales of the bullish argument which sees a company that had $25 million in annual revenue for the year ending March 2014, and should be around $150 million by that same time in 2016. It's pretty clear to see, PLUG has a wildly bullish upside thesis, and a catastrophic risk of failure.

Fundamentals

##Symbol##PLUG Plug Power (PLUG) is a fascinating company with a fascinating history and a rather fascinating CEO. PLUG is in the fuel systems and storage business. It hit the mainstream news rounds when the stock rose literally from pennies to about $12 in stock price. Since then, the stock has fallen back down over 80%. The run up was a bit of bad money chasing overblown momentum, but the fundamentals surrounding the firm did drastically change for the better. All of a sudden the company is signing multi-million dollar contracts and to date, those contracts have come in. Either you believe the growth story and ignore the current fundamentals, or you ignore the growth story and believe the current fundamentals. The stock hit a 52 week low on July 6th, and it snapped back hard the next day as its very camera comfortable CEO released some bullish news about the quarter about to be released. Earnings are officially due out on August 6th, but we just got a chunk of information. We learned that its GenDrive saw shipments more than double in the quarter and the company said that would unambiguously drive the company to record revenue. The GenDrive sales hit 888 units, up from 419 in the first quarter, and even more impressive, the company re-asserted its guidance that 3,300 GenDrive units would be delivered in 2015 a long with 15 genFuel systems (Source: The Motley Fool. Those sales altogether are expected to drive $200 million in revenue. As a point of reference, in the trailing twelve months (TTM), PLUG has generated $68 million in revenue. There are a few misconceptions about his firm that I think need to be cleared up. First, this is not a new firm, it has been public for more than 15-years, it's simply "newly interesting." Also, regardless of the low stock price, its market cap as of this writing is over $440 million. This is not a micro cap. For a company with no profit, no expected profit and sales below $100 million right now, we can't just wildly say it's undervalued. But, there is an argument that it will be undervalued if it delivers on what appears to be continued promising news. There is also an argument that it's overvalued. We will look at both in an unbiased and objective way, just as Wall Street would, but Main Street has been unable to, until now from CMLviz.com. We're breaking the information asymmetry that was benefited the few at the cost of the many. Join the revolution; half a million people have already. And it's free. Forever. Period.

Technicals   |   Support: 2.32   |   Resistance: 2.82   

Swing Death Cross Alert: The short-term 10 day MA is now below the 50 day MA. PLUG has a three bull (stock is range bound) technical rating because its trading above its 10- and 50-day moving averages, but below its 200- day moving average. The stock is up on the day but the 10-day MA is below the 50 day MA ("swing death cross"). Let's look at the core elements that drive the company's fundamental rating.

Fundamentals Rating Summary

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Revenue (TTM US$ Millions) 68 26 25 RISING Operating Margin (QTR) 0.425 0.43 0.50 FALLING Net Income (TTM US$ Millions) -24 -130 -34 RISING Levered Free Cash Flow (TTM US$ Millions) -32 -19 -12 FALLING Capital Expenditures (TTM US$ Millions) 1 0 0 RISING

Stock Returns and Chart

PLUG is up +0.2% over the last three months and down -4.6% over the last six months. The stock has returned -53.0% over the last year. Before we dig into the fundamental trends that drive the rating, let's look at a two-year stock chart with regression channel and 10-day momentum (on the bottom). Click here to interact with this stock chart Now let's examine the visualizations of the critical financial measures.

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Revenue (TTM US$ Millions) 682625RISING

When a company grows revenue 165% year-over-year, we must recognize the added importance of top-line growth, perhaps even above and beyond earnings, free cash flow and margins. Regardless of the low 1.5 fundamental (star) rating, if revenues continue to explode, everything could follow suit for PLUG. And we do have strong circumstantial, if not empirical evidence that revenues are about to absolutely explode. What do all these numbers mean? PLUG's fundamental rating benefited these results: 1. The one-year change was positive. 2. The one-year change was greater than +20% (an extra boost to the rating). 3. The two-year change was positive. Let's look at Revenue (TTM US$ Millions) in the chart below. That green bar represents the all-time high and sits at $68 million. We have news that it could hit $200 million in the relatively near-future. This is the bullish narrative and it is powerful. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Operating Revenues/Operating Expense 0.4250.430.50FALLING

This ratio (which simply represents how much revenue is generated per one dollar of expense) must be at a minimum above 1.0 in order for a company to turn an operating profit. PLUG generates $0.42 in revenue for every $1 in expense, which is extremely poor and substantially below the sector average of $1.00. Look, there is a bullish thesis, no doubt, but if a company spends $1 to make $0.42, it can't just make it up on volume unless it realizes substantial economies of scale. I do note that the entire sector is barely breaking even with companies like FuelCell Energy (FCEL) haemorrhaging losses, and a top performer like PowerSecure (POWR) (which is up 55% in the last year) still showing a $3 million loss. PLUG is funding operations by selling stock and there is a non-trivial chance of failure here. What do all these numbers mean? One year ago Operating Revenues/Operating Expense was 0.43. In the last year we can see operating margins are decreasing and less than 1.0 for the most recent quarter (below the critical level). PLUG's fundamental rating was affected from the operating margin numbers in the following ways: 1. The current value is below the critical 1.0 level (the firm generates an operating loss). 2. The one-year change was negative (lowers the rating). Let's look at Operating Revenues/Operating Expense in the chart below with the total assets in the orange line. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Net Income (TTM US$ Millions) -24-130-34RISING

Net Income (after tax profit) over the trailing twelve months (TTM) for PLUG is rising but substantially negative and has been for more than 15 consecutive years. For the most recent trailing-twelve-months (TTM) the company reported net income of -$24 (million). Obviously, with an operating margin of 0.42, more revenue isn't going to result in earnings, but, that bottom line is getting a little better. In our next chart we plot Net Income (TTM US$ Millions) in the blue bars and the quarterly results in the gold line. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Levered Free Cash Flow (TTM US$ Millions) -32-19-12FALLING

Levered Free Cash Flow (TTM US$ Millions) is a critical determinant of stock price since market cap is the present value of all future free cash flows. For PLUG the metric is falling, and it has been negative forever. Enough said. For our next chart we plot Levered Free Cash Flow (TTM US$ Millions) in the blue bars through time. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Capital Expenditures (TTM US$ Millions) 100RISING

##Symbol##PLUG

Plug Power Inc. (PLUG) 2.61 -0.05 (-1.88%) Sector: Electrical Equipment Published by Capital Market Laboratories on 2015-06-17 What does the rating mean? 3-Month Stock Move: -5.1% 6-Month Stock Move: -4.4% 12-Month Stock Move: -36.3% _________ 30-day Option Implied Volatility: 52.0% Implied Stock Range: ($2.30, $2.90) What does "implied stock" mean?

PLUG is in the fuel systems and storage business. It hit the mainstream news rounds when the stock rose literally from pennies to about $12 in stock price. Since then, the stock has fallen back down over 80%. The run up was a bit of bad money chasing overblown momentum, but the fundamentals surrounding the firm did drastically change for the better. That's simply a fact. All of a sudden the company is signing multi-million dollar contracts and to date, those contracts have (for the most part) come in. On the other hand, the company has never turned a profit or positive free cash flow and it is sustaining operations with a rather sizeable stock selling program. But, love it or hate it, PLUG has seen revenue (TTM) rise over both one- and two-years by 164.55% and 174.46%, respectively. Revenue in the most recent trailing-twelve-months is $68 million. Last year PLUG reported $26 million and two-years ago annual revenue was $25. The average estimate for next quarter's revenue of $19.7 million is well above last quarter's $9.4 million. In English, revenue is busting at the seams. It's everything else that's the problem. Here are the earnings estimates, note the expected revenue increase.

EARNINGS ESTIMATES Earnings Date EPS Revenue (Mean) Revenue (Median) Last Quarter (Actual) 2015-08-13 $-0.06 $19.7 M $19.7 M $9.4 M Provided by ZACKS

Here are the core fundamental factors driving the 1.5 star rating.

Fundamentals Rating Summary

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Revenue (TTM US$ Millions) 68 26 25 RISING Operating Margin (QTR) 0.425 0.43 0.50 FALLING Net Income (TTM US$ Millions) -24 -130 -34 RISING Levered Free Cash Flow (TTM US$ Millions) -32 -19 -12 FALLING Capital Expenditures (TTM US$ Millions) 1 0 0 RISING

Stock Returns and Chart

PLUG is down -5.1% over the last three months and down -4.4% over the last six months. The stock has returned -36.3% over the last year. Before we dig into the fundamental trends that drive the rating, let's look at a two-year stock chart with regression channel and 10-day momentum (on the bottom). Click here to interact with this stock chart Now let's examine the visualizations of the critical financial measures.

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Revenue (TTM US$ Millions) 682625RISING

When a company grows revenue 164.55% year-over-year, we must recognize the added importance of top-line growth, perhaps even above and beyond earnings, free cash flow and margins. Regardless of the low 1.5 fundamental (star) rating, if revenues continue to explode, everything could follow suit for PLUG. Having said that, we must (and will) look at the rest. What do all these numbers mean? PLUG's fundamental rating benefited these results: 1. The one-year change was positive. 2. The one-year change was greater than +20% (an extra boost to the rating). 3. The two-year change was positive. Let's look at Revenue (TTM US$ Millions) in the chart below. Note the EXPLOSION. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Operating Revenues/Operating Expense 0.4250.430.50FALLING

This ratio (which simply represents how much revenue is generated per one dollar of expense) must be at a minimum above 1.0 in order for a company to turn an operating profit. For the latest quarter PLUG showed a ratio of 0.425. So, just to be clear, PLUG pays one dollar in expenses to generate $0.43 in revenue. If you look closely at the chart, you'll note the firm has never even been close to $1 (the highest level ever was still below $0.75). Even further, that awful margin is actually getting worse. What do all these numbers mean? One year ago Operating Revenues/Operating Expense was 0.43. In the last year we can see operating margins are decreasing and less than 1.0 for the most recent quarter (below the critical level). PLUG's fundamental rating was affected from the operating margin numbers in the following ways: 1. The current value is below the critical 1.0 level (the firm generates an operating loss). 2. The one-year change was negative (lowers the rating). Let's look at Operating Revenues/Operating Expense in the chart below with the total assets in the orange line. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Net Income (TTM US$ Millions) -24-130-34RISING

Even though PLUG loses money every day it exists, this metric is in fact improving, and it's improving rather drastically. For the most recent trailing-twelve-months (TTM) the company reported net income of -$24 (million). A year ago that was a $134 million loss. The quarterly loss most recently reported was "just" $12 million. Hey, that's better. In our next chart we plot Net Income (TTM US$ Millions) in the blue bars and the quarterly results in the gold line. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Levered Free Cash Flow (TTM US$ Millions) -32-19-12FALLING

I'll keep the conversation short surrounding Levered Free Cash Flow (FCF) (TTM US$ Millions). The bottom line is it's negative and getting worse. For the full year ending Dec 2012, PLUG generated negative $4 million in FCF. For the most recent trailing-twelve-months, PLUG has generated -$32 million in FCF. Let's look at Levered Free Cash Flow (TTM US$ Millions) in the blue bars through time. It ain't pretty. Click Here to Interact With This Chart

METRIC CURRENT 1YR AGO 2YR AGO DIRECTION Capital Expenditures (TTM US$ Millions) 100RISING