Bear markets have been seen, taking a bite out of most investors’ portfolios S&P 500 It is down more than 17% since its inception on January 3, 2022. But the market is particularly undercharged Plug strength (Plug 2.13%)Since the fuel cell specialist’s stock has fallen 43% over that time frame, according to data provided by S&P Global Market Intelligence.
Despite continued interest in expanding hydrogen’s role in the energy landscape, investors have lost enthusiasm for Plug Power, a popular name in the hydrogen industry that has consistently failed to prove it can achieve profitability.
Despite the stock’s decline in 2022, Plug Power reported several gains. For one, it’s growing the top line — something it’s excelled at over the past few years. For the first nine months of 2022, Plug Power booked sales of $480.7 million, representing a 41% increase over the same period in 2021.
Good news, right? Of course, for a growth company like Plug Power, growing the company’s revenue is great, but the problem is on the bottom line of the income statement.
For the first three quarters of 2022, Plug Power reported a net loss of $500.5 million — significantly higher than the $267.1 million net loss it reported during the same period in 2021. Herein lies the problem. In 2022, investors became less tolerant of the company’s consistent losses.
And it wasn’t just the lack of profits that charged bears to sell the stock last year. Equally related – if not more so – was the company’s consistent cash flow. For the first nine months of 2022, Plug Power reported negative cash from operations of $522 million. During the same period in 2021, Plug Power – reported operating cash flow of $349 million.
Although the market has punished Plug Power’s stock during bear markets, the bulls seem to be making a comeback. Shares of Plug Power are up 34% since the start of the new year, thanks in part to a newly announced supply deal.
However, long-time followers of plug power know that this is far from unusual. The stock’s history is replete with examples of rapid growth due to promising news announcements.
Shares are unlikely to fully recover from the slide they suffered during the bear market if Plug Power continues to report steep losses — which could happen in the upcoming quarterly report. Fortunately, for hydrogen investors, there are plenty of other options.
Scott Levine has no positions in the stocks mentioned. Motley Fool has no position in any of the stocks mentioned. Motley Fool has a revealing policy.