Roth Cuts Plug Power (PLUG) to Neutral; Valuation Full, N-T Risks Remain
Analyst Philip Shen sees Plug Power shares as
fully valuedat current levels, ebbing of bookings growth, and near-term execution risks on the radar.
Shen noted that year-to-date bookings were $60 million in 2014, implying Q1 bookings of over $60 million. New orders for FY14 are expected to exceed $150 million, implying around $90 million of bookings for Q2 to Q4. The analyst sees the $30 million per month run rate as already being baked into the stock.
On execution, Shen said,
While we are encouraged by PLUG’s production capacity of ~2,500 units per quarter, we believe infrastructure risk could put some shipments at risk of delay. Management indicated that ~25 percent of the 3k units of expected 2014 shipments are destined for sites with hydrogen infrastructure already in place. This leaves ~2,250 units (or 75 percent of expected 2014 shipments) subject to delay if infrastructure installs take longer than planned.
Shen noted that Plug Power goes for about 11.3 times expected FY15 revenue estimates, versus an average 4.4 times for segment peers.
FY14 loss expectations at Roth narrows from $.17 per share up to $.12 per share. Revenue expectations were held at $60 million.
An upgrade could come from strong execution on shipments, improved product gross margin in H214, pick up in bookings run-rate, and material progress in driving shipments into new markets.