Plug Power (PLUG): Improving Metrics As Customer Base Diversifies - FBR Capital
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FBR Capital analyst Carter Driscoll reiterated a Outperform rating and $3 price target on Plug Power (NASDAQ: PLUG) saying project financing obscures improving metrics.
Driscoll commented, "PLUG's 2Q16 results appear weak with $20.5 million in revenues, modestly positive gross margin, and GAAP EPS of ($0.07). However, PLUG is using more PPA project financing that obscures its financial improvements as management believes PPAs can drive faster sales cycles and accelerate cash flows. Adjusting for these newer financing alternatives, PLUG delivered $37.9 million in revenues, up 58% YOY. Adjusted gross margin of 16.1% was up almost 1,000 bps YOY, and adjusted EPS of ($0.04) were $0.02 ahead of our and consensus estimates. PLUG delivered solid 2Q16 and 1H16 bookings of $63 million and $135 million, respectively. Leading customer Wal-Mart was only 15% of 2Q16 bookings as PLUG added wins with Carrefour Group and FM Logistics as its European presence is expanding. PLUG reiterated its 2016 goals of more than $150 million in adjusted revenues, installation of >25 hydrogen infrastructure sites, more than 12% GAAP and 16% non-GAAP gross margin, and use of less than $20 million in operating cash flows. We see a path to positive cash flow in 2017 and reiterate our Outperform."
Shares of Plug Power closed at $1.70 yesterday.
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