Plug Power Stock’s Wild Ride: Brace for Impact or Bail Out Now?
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Plug Power stock (NASDAQ:PLUG) is in a difficult spot. The company obviously has a viable business and product. It has a list of top-name partners either using its products and services or helping it build out a vertical supply chain.
On the other hand, Plug Power stock can’t make money. It is selling its fuel cells at a significant loss resulting in negative cash flows as it burns through the cash it has on hand. It’s why it was forced to include a going concern notice last year, though it subsequently removed the wording from its annual report.
Investors have been the losers. Plug Power stock is down 30% in 2024, off 67% over the past year and the hydrogen fuel cell leader has lost over 95% of its value from the all-time high hit in 2021. During that time shareholders have suffered through significant dilution as Plug issued ever more shares. Between 2018 and 2023, PLUG stock’s share count grew from 218 million to over 595 million.
It’s past time investors looked dispassionately at their company. Plug Power is not in a good spot and despite its cheap valuation, the stock is not a buy.
Profits are always just over the next hill
Plug Power generated nearly $1 billion in revenue in 2023, a record for the company, and 27% higher than the year-ago figure. But net losses nearly doubled to $2.50 per share, though they were caused in part by investing in growth and expansion projects. CEO Andy Marsh says 2024 will be the year Plug Power gets its financial house in order.
“Recognizing the past challenges with cash management, we are dedicated in 2024 to bolstering our financial profile. Our commitment to driving forward the hydrogen economy remains unwavering.”
That’s fine, but investors have heard that refrain before. Last year Marsh was confident 2023 was the year it would achieve break-even margins. He also forecast generating $2 billion in sales on its way to $20 billion in revenue(!) by 2030. Shareholders have likely learned to discount the grandiose claims management makes at this point.
Yet this is a real business
As noted at the start, Plug Power stock is not some vaporware business. Its fuel cells work in the warehouses of Home Depot (NYSE:HD), Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN). Walmart, in fact, accounts for over 23% of Plug’s revenue. That includes a warrant charge of $5.9 million resulting from a 2017 agreement between Plug, the retailer, and Amazon to purchase some 55.3 million shares of company stock over a period of years.
The warrants are recorded as a reduction in revenue so the contribution amount is actually higher. At the end of last year, almost 35 million of Walmart’s warrant shares had vested. All of Amazon’s 55 million warrant shares have vested. Plug’s second-largest customer accounts for almost 11% of total revenue.
So it’s not as though Plug’s customers aren’t invested in its success. It’s just that Plug Power can’t seem to turn into a profitable business.
Wait for PLUG stock to make good
Whether or not Plug Power is pinky-swear level ready to make 2024 its year to turn around, investors shouldn’t hold their breath. They’ve been promised this for so long they ought to be numb to management’s entreaties at this point.
As hard as it may be to let go, 2024 should be the year shareholders sell their stock and wait for Plug Power to make good on its promises. Only then should investors be willing to put their money into play again. Until then, Plug Power stock can only be considered a sell.
On the date of publication, Rich Duprey did not hold (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.
3 Overlooked Growth Stocks Trading at a Bargain This Month
Companies with healthy revenue and EBITDA growth visibility team with strong fundamentals
When growth stocks shine in the limelight, they rarely trade at a valuation gap.
Investors continue to buy in an uptrend on the fear of missing out on a potentially bigger rally. However, a value investor will agree that it’s best to avoid stocks that are too much in the limelight.
In an ocean of stocks, it’s not surprising if some great ideas are overlooked by the markets. However, it’s unlikely that quality stocks will remain undervalued for an extended period. When the trend reversal comes, the upside can be sharp.
And even with recent inflation numbers, it’s likely that the first-rate cut will come in 2024. Expansionary monetary policies are good for high-beta stocks. Therefore, it’s time to accumulate growth stocks that have been overlooked.
Let’s discuss the reasons to be bullish on these growth stock ideas.
Miniso Group (MNSO)
First, Miniso Group (NYSE:MNSO) has trended higher by 25% in the last 12 months. However, the stock deserves to trade at higher valuations considering the growth trajectory. I expect a bigger rally in the coming quarters with the stock trading at a forward price-earnings ratio of 17.3.
As an overview, Miniso is a lifestyle retailer with strong presence in China and expanding global presence. The company differentiates itself through a dynamic product portfolio that’s offered at an attractive pricing.
For Q2 2024, Miniso reported revenue growth of 54% on a year-over-year (YOY) to $541 million. For the same comparable period, adjusted EBITDA margin was 200 basis points higher at 25.9%. Therefore, stellar growth has been associated with margin expansion and cash flow upside.
Furthermore, Miniso ended 2023 with a store count of 6,413. So, the number of stores increased by 973 YOY. MNSO targets to open 1,000 stores each year between 2024 and 2028, which is likely to ensure robust revenue growth.
Leonardo DRS (DRS)
Another quality growth stock that’s likely to be a value creator is Leonardo DRS (NASDAQ:DRS). Providing defense electronic products and systems, its concentrated areas include advance sensing, network computing, force protection and electric power & propulsion.
The stock has been trending upward, with a rally of 40% in the last 12 months. However, with focus on the defense sector, expect healthy growth for this attractively valued stock.
Notably, Leonardo DRS owns a strong order backlog of $7.8 billion. This provides clear revenue visibility. Since November 2022, the company’s order backlog has swelled by 2.5x. With geopolitical tensions and focus on defense technology, order intake may remain robust.
Also, Leonardo DRS is significantly investing in research and development. Recently, the company received an award for its “cooled infrared sensor that unlocks the ability for advanced military and scientific capabilities across multiple domains.”
Borr Drilling (BORR)
Investors will want to consider Borr Drilling (NYSE:BORR) before it surges higher. BORR has declined by 23% in the last 12 months and trades at a forward price-earnings ratio of 8.4. Further, the stock offers a dividend yield of 1.72%, which are likely sustainable.
The provider of offshore drilling services, the company reported a strong order backlog of $1.75 billion as of December 2023. With oil trending higher, expect order intake to remain healthy. Recently, BORR announced contracts for its premium jack-up rigs totaling $158 million.
Additionally, Borr Drilling reports adjusted EBITDA of $351 million for 2023. For the current year, the company has guided for adjusted EBITDA of $525 million. Therefore, healthy revenue and EBITDA growth is likely in coming quarters coupled with margin expansion. This is likely to ensure that BORR stock trends higher from undervalued levels.
On the date of publication, Faisal Humayun did not hold (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.
Buy Or Sell? #trading #ict
Trouble at Tesla: 3 More EV Stocks to Sell Before They Short-Circuit
There are some EV stocks to sell for this April. Sometimes, it’s best to ditch companies that are underperformers, instead of hanging on for a chance to recover. The EV market has seen significant volatility in recent months, with many high-profile companies struggling to maintain momentum. Investors may want to consider selling off positions in EV startups or established automakers that have failed to keep pace with industry leaders.
Tesla (NASDAQ:TSLA) is one of those companies that has faced difficulties recently, and some other EV stocks have also followed suit. Tesla’s stock fell after it missed first-quarter delivery estimates, selling under 387,000 vehicles, marking a 20% decrease from the prior quarter and an 8.5% year-over-year drop, its first since early 2020.
This shortfall from Wall Street’s expectation of 457,000 deliveries was described as an “unmitigated disaster” by analysts.
The three EV stocks to sell in this article show some troubling signs that they could repeat TSLA’s fiasco. So here are the companies to avoid.
ChargePoint (CHPT)
Amidst a challenging year for ChargePoint (NYSE:CHPT), workforce reductions and infrastructure gaps have contributed to a significant stock price decline — the worst has yet to come for the company.
In fiscal year 2024, CHPT reported a revenue increase to $506.6 million, marking an 8% growth from the previous year. However, this period also saw challenges including a decrease in networked charging systems revenue by 1% to $360.8 million and a significant increase in net loss to $457.6 million from $345.1 million in the prior year.
The gross margin dropped to 6% from 18% due to various factors, including restructuring costs. Looking ahead, CHPT anticipates revenue between $100 million and $110 million for Q1 fiscal 2025, representing a projected decrease compared to the same period last year.
The company is expected to remain unprofitable for the next couple of years as the best-case scenario, per analyst projections. There are better options out there for investors to take advantage of.
Mullen Automotive (MULN)
Mullen Automotive (NASDAQ:MULN), often buoyed by social media hype, has seen its stock plummet despite briefly regaining Nasdaq compliance.
MULN is a meme stock rather than a serious invest that is bullish on the long-term prospects of the industry. It could already be dead in the water, as its stock price has fallen 99.83% over the past year alone.
Financially, MULN recorded its first revenue from vehicle sales in 2023, delivering 35 vehicles and generating $366,000 in revenue. However, the company faced significant non-cash write-downs due to decreased market values, including a $64 million goodwill impairment charge and write-downs of other assets.
There’s not much sense in holding on to a company that is struggling this much, and its prospects for recovery are limited, having delivered just 35 vehicles. Although it may trade as cheap as lottery tickets, its negative free cash flow of $226.48 million for the past twelve months means it must institute a capital raise, either thru debt or equity, thus making it riskier still to hold on to.
Faraday Future (FFIE)
Faraday Future (NASDAQ:FFIE) is concentrating on reducing operational costs and achieving cash flow breakeven. A focus on cost reduction — specifically in the Bill of Materials — has led to significant savings, such as an approximately $50,000 reduction in costs for a key vehicle component.
However, and despite these efforts, this probably will not be enough for Faraday to turn its fortunes around. Faraday has displayed signs of financial distress, as indicated by an Altman Z-Score of -12.52, suggesting a high risk of bankruptcy.
These problems are underscored by its negative cash flow of 290.29 million, and analysts predict that it won’t break even in the foreseeable future. Like Mullen, it must raise funds either through debt, equity, or both. Its tiny stock price and market capitalization may offput creditors to lending it funds.
Faraday simply poses too much risk for a relatively small upside, so this fits into the basket for there being better opportunities elsewhere.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
3 Must-Own Stocks to Buy for Under $5 Before They Blast Off
Discover the growth possibilities in the trio based on emerging technologies, top-line growth, and sustainable business models
Finding high-return potential in the market may be both thrilling and intimidating. These stocks present prospects because of their strategic placement within the information technology industry and their skill in identifying and following new market trends.
The first, for example, positions itself at the forefront of blockchain technology and crypto analytics by leveraging the growing crypto economy with cutting-edge products like StakeSeeker and ChainQ.
The second, however, sticks out due to its strong top-line growth and dominant position in the communications equipment sector. The company exhibits its skill in grasping market opportunities and providing real value. Its high cash flow generation also highlights its potential for development and stability.
The third company stands out the most in the subscription-based services category. Its annualized recurring revenue (ARR) has increased steadily, and its client retention rate is remarkable. By dedicating itself to client pleasure and devotion, the company remains a trustworthy investment choice in the IT industry.
All things considered, these three companies under $5 present investors with various chances to profit from new technology, industry trends, and revenue development paths.
Stocks Under $5 to Buy: BTCS (BTCS)
In January 2023, BTCS (NASDAQ:BTCS) introduced StakeSeeker, a platform for staking as a service and crypto analytics. The platform seeks to boost fee-based income by distributing rewards for assets assigned to BTCS nodes. By utilizing cryptocurrency assets for staking and varying its sources of income, BTCS sets itself up for long-term success in the developing cryptocurrency market.
Indeed, the cryptocurrency industry has gained positive momentum. This is due to the SEC’s approval of Bitcoin ETFs in 2023 and the expectation for Ethereum ETFs in 2024. These Spot Bitcoin ETFs draw in mainstream capital and boost advancement by acting as links between traditional and cryptocurrency ecosystems. The favorable outlook in the market for ETF approvals boosts BTCS’s prospects for expansion.
Furthermore, Ethereum’s network updates, such as the “Dencun Hardfork,” increase data storage capacity and network functionality. By participating in projects like Builder+, BTCS may take advantage of Ethereum’s ongoing growth and popularity within the ecosystem.
Lastly, BTCS is developing an AI-enhanced blockchain data and analytics platform called Chah, scheduled to deplay in 2024. Overall, ChainQ will make comprehensive public blockchain data indexing possible and provide a user-friendly platform for on-chain information access.
Ceragon (CRNT)
One core factor behind Ceragon’s (NASDAQ:CRNT) growth is the company’s increasing revenue. Ceragon attained $90.4 million in revenue for Q4 2023, a whopping 20% increase over Q4 2022 when revenues were $75.5 million. This considerable boost from the previous year shows that the company may take advantage of market opportunities, grow its clientele, and provide value through its offerings.
Additionally, Ceragon’s continuous top-line growth during the year resulted in full-year revenues of $347.2 million in 2023. This is an 18% growth compared to the $295.2 million in revenue from the prior year, highlighting Ceragon’s consistent growth trajectory and competitive position in the market.
Furthermore, despite the cash burden associated with the acquisition of Siklu, Ceragon generated over $30 million in cash from operations for the entire year of 2023. The company also revealed a $10 million positive free cash flow for the entire year, demonstrating its capacity to produce cash above its capital expenditures.
To sum up, strong cash flow production supports Ceragon’s capacity for growth and financial stability. Hence, this indicates that the company can produce positive cash flows.
Rimini Street (RMNI)
An essential factor in assessing the stability and growth trajectory of a subscription-based company such as Rimini Street (NASDAQ:RMNI) is ARR. At $432.3 million in Q4 2023, this represents a 2.9% boost over Q4 2022. This pattern shows that Rimini Street’s recurrent income base is steadily increasing. This is consistent with its capacity to draw in new business and retain its current clientele. Rimini Street has top-line sources that are dependable and predictable. That’s why ARR’s steady growth indicates the company’s potential for quick expansion.
Moreover, over 79% of subscription income is due for renewal after a minimum of 12 months. This highlights the enduring dedication of Rimini Street’s clientele, thus augmenting the steadiness of its income foundation. Thus, the clientele and retention rate of Rimini Street are important measures of client satisfaction and loyalty.
To conclude, with a substantial client retention percentage, Rimini Street has held onto a substantial clientele. The organization has maintained the majority of its clientele despite some attrition, which speaks to the quality of its offerings and client happiness.
On the date of publication, Yiannis Zourmpanos did not hold (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.
FINANCE STOCKS are NEXT Multi-baggers (10 Assets I'm buying) | Akshat Shrivastava
Portfolio Poison: 3 Toxic Stocks to Purge Immediately
Bears have faced a challenging few years, feeling like an eternity since the 2019 flash crash had pessimists forecasting a financial downturn akin to the 2008 crisis. Similarly, the early stages of the pandemic painted a grim economic picture — until unexpected monetary policies propelled stocks to unprecedented heights, even as reasonable assessments made them clear stocks to sell immediately. The Federal Reserve’s policy shift further intensified bearish sentiment, sparking fears of recession and leading to a stock dip in 2022, though the market has since rebounded, hitting fresh all-time highs.
However, this narrative of overall market resilience doesn’t extend to individual stocks. In recent years, numerous stock scams, cases of severe overvaluation and irrational exuberance have been unveiled, culminating in the grounding of previously soaring stocks as investors prioritize financial fundamentals more than ever.
Despite their grim prospects, these faltering stocks continue to cling on. If you currently own any of these stocks, it may be time to sell them ASAP.
Vornado Realty (VNO)
The income alone highlights the challenges facing Vornado Realty (NYSE:VNO), a commercial real estate stock. With its dividend suspended for most of 2023 due to declining income and rising rates, 2024’s prospects appear dim. In December 2023, Vornado informed investors of its plan to distribute only one dividend in the fourth quarter of 2024, a significant departure from the quarterly payments income investors typically expect. This situation places Vornado’s difficulties in stark contrast to those of Realty Income (NYSE:O), which has managed to retain its title as the “Monthly Dividend Company.”
Vornado’s year-end report is likely to unsettle even the most optimistic commercial real estate investors and make it a clear stock to sell immediately. The company reported a net loss of 32 cents per share for the fourth quarter and struggled to achieve overall profitability for the year. The apparent annual profit largely results from accounting maneuvers rather than genuine business success, with non-cash transactions such as credit losses, property impairments and deferred tax liabilities artificially inflating its bottom line.
Bark (BARK)
Subscription-based pet stock Bark (NYSE:BARK) became a casualty of the SPAC-mania, with its value plummeting to a mere fraction of its pre-merger peak. Investors eventually recognized the stark reality of Bark’s financials and the lack of a compelling value proposition, leading to a loss of confidence Still, some hold onto a false hope that Bark remains a winner, rather than a stock to sell immediately.
The downturn is most noticeable in Bark’s flagship BarkBox product, which thrives in an economic climate flush with household discretionary income — a condition not reflected in the current economy. This has resulted in a consistent decline in sales over recent quarters. Bark has never achieved profitability, a critical factor for investors in today’s economic environment. The allure of long-term growth prospects without a solid fundamental basis no longer appeals to investors as it might have in 2021. Consequently, Bark represents another example of a stock whose valuation surged too rapidly, only to fall just as quickly.
Peloton Interactive (PTON)
I use and love my Peloton Interactive (NASDAQ:PTON) bike daily, but I wouldn’t touch the stock with a ten-foot pole. Following product recalls and a spike in insider stock sales, Peloton’s outlook appears dim.
The company’s latest earnings report revealed a per-share loss nearly twice what analysts had anticipated. Concurrently, Peloton saw an uptick in its churn rate (subscriber cancellations), while the influx of new customers failed to offset this loss. Management attributed this to seasonality, a valid point to some extent. However, as a luxury item aimed at consumers with disposable income, Peloton’s market is now saturated with those who desire and can afford its products, significantly narrowing the scope for acquiring new customers.
Speculation about a potential acquisition has been rampant since Peloton’s stock began its decline, and I, for one, hope these rumors materialize into a buyout sooner rather than later. The last thing I want is for my fitness equipment to turn into an expensive paperweight should Peloton cease operations and abandon its remaining subscribers.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
3 Red-Hot Stocks With Long-Term Growth Potential
Don’t let momentum push you away from what could be the market’s best long-term winners
Many value investors may ignore the red-hot stocks in the market just because of their momentum. Undoubtedly, stocks that surge by double-digit percentage points in a matter of weeks are too hot to touch for many investors. So, momentum alone does not indicate a bubble or even overvaluation.
As long as the fundamentals are improving and the earnings growth is moving accordingly, stock price appreciation may be warranted. And, you may have situations where high-flying stocks appear cheaper after a sizable upward move.
Let’s check three momentum stocks that have the potential to be long-term winners.
Nvidia (NVDA)
Based on traditional valuation metrics, Nvidia (NASDAQ:NVDA) stock certainly looks cheaper after its latest blowout quarter. Still, many may continue to slam Nvidia as a bubble, even as it readies its next generation of chips to fuel a demand boom that Nvidia alone may not be able to fill alone.
Finishing Thursday’s session up more than 4%, the AI chip kingpin bounced back from a brief correction. Now, that’s starting to look like a pretty solid, albeit short-lived, buying opportunity. With the $1,000 level realistically in sight, rushing to the exits may prove ill-timed, especially as Blackwell looks to repeat the magic in 2024.
Undoubtedly, there’s a high bar to pass for NVDA now that expectations have risen so high. However, at 36.1 times forward price-to-earnings (P/E), the stock actually looks too cheap for its own good. True, the chances are high that Nvidia stock’s multi-year bull run will end in a painful sell-off. Until then, though, you’ll have to look far and wide to find something to be bearish about.
Perhaps Nvidia’s numerous collaborations with other tech titans, as outlined in its 2024 GTC conference, could be key to keeping growth going strong. Either way, I don’t think it’s too late to hop aboard the NVDA stock bandwagon as long as a 20-40% drop over the near term won’t deter you.
Amazon (AMZN)
Amazon (NASDAQ:AMZN) is another tech juggernaut that’s making the most of the great AI bull market. Recently, shares hit all-time highs for the first time since mid-2021. It has a larger $4 billion stake in Anthropic and a more deliberate investment strategy that entails cautious strategic cost cuts and aggressive AI spending. Thus, Amazon may be in a spot to take its growth to the next level.
Also, Amazon’s AI-focused growth story may seem somewhat similar to its public cloud peers. The company is betting big on its own AI acceleration hardware. In fact, it spares no expense in investing in third-party large language model (LLM) companies. And, it’s been doubling down on the cloud’s AI-focused future.
What sets Amazon apart from the pack, though, is its legendary management team’s hunger to disrupt. CEO Andy Jassy is serious about capitalizing on the generative AI revolution while minimizing expenses where possible. Perhaps big bets in AI today may lead to the biggest cuts down the road. Either way, I would not dare bet against the company now that its stock is chasing new highs again.
Apple (AAPL)
Never discount Apple (NASDAQ:AAPL) and its ability to innovate in a fast-moving, AI-driven technological landscape. The stock surprised many when it blasted off 4.33% over $175 per share on Thursday on news that its coming M4 chip will be AI-focused.
Indeed, an AI-driven M4 could breathe new life into the company’s stagnant Mac business. And it may do so sooner than many skeptics think, with the chip that could land as soon as this year.
Indeed, the Mac is a relatively small part of Apple’s business as it stands today. And so, it could grow to contribute a larger piece of Apple’s revenue pie in the near future if it makes AI PCs better than rivals.
Combined with a robust services business (perhaps an AI service will be in Apple’s future) and the potential for an AI-powered A-series chip for a future AI-focused iPhone, AAPL remains one of the best deals. It’s just 27.2 times trailing price-to-earnings.
On the date of publication, Joey Frenette owned shares of Apple and Amazon. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
