The Federal Reserve’s hawkish stance has helped the economy to witness a slight decline in inflation last month. Moreover, better-than-expected corporate earnings and fiscal policy support have renewed investors’ confidence in the market.
But the possibility of the central bank signaling another 75-basis-point interest rate hike in its Jackson Hole conference and related recession fears are expected to keep up the volatility. The weakening economic data from China and soaring inflation in the UK should also keep the market under pressure.
Thus, Plug Power Inc. (PLUG), Sunrun Inc. (RUN), and GreenPower Motor Company Inc. (GP), with negative profit margins and weak financials, are expected to keep losing.
Plug Power Inc. (PLUG)
PLUG is a provider of alternative energy technology that focuses on designing, developing, and commercializing hydrogen fuel cell systems used for the industrial off-road and stationary power markets.
It offers its products to retail distribution and manufacturing businesses through a direct product sales force, original equipment manufacturers, and dealer networks.
On August 4, 2022, integrated gas-to-power company New Fortress Energy Inc. (NFE) selected PLUG to supply its industry-leading proton exchange membrane (PEM) electrolysis technology for a 120-megawatt industrial-scale green hydrogen plant near Beaumont, Texas.
Strongly aligning with PLUG’s decarbonization goals and NFE’s energy transition goals, this technology will produce more than 50 tons per day (TPD) of green hydrogen.
For its fiscal 2022 second quarter ended June 30, 2022, PLUG’s gross loss decreased 19.4% year-over-year to $32.47 million. Its operating loss came in at $146.91 million, representing a 63.9% rise from the prior-year period.
While its adjusted net loss declined 73.9% year-over-year to $173.30 million, its adjusted loss per share fell 66.7% to $0.30. As of June 30, 2022, the company had $2.26 billion in cash and cash equivalents, down 9.1% from the end of fiscal 2021.
PLUG’s EPS is expected to remain negative in fiscal 2022 ending December 31, 2022. Its EPS is expected to decline at a rate of 40% per annum over the next five years.
The stock’s trailing-12-month ROE, ROA, and ROTC are negative. Over the past week, the stock has lost 9.2% to close the last trading session at $26.82.
PLUG’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
It has an F grade for Stability, Sentiment, and Quality and a D for Growth and Value. Click here to see the additional ratings for PLUG’s Momentum.
PLUG is ranked #86 of 90 stocks in the C-rated Industrial - Equipment industry.
Sunrun Inc. (RUN)
RUN is a home solar, battery storage, and energy services company that designs, develops, installs, sells, owns, and maintains residential solar energy systems. It markets and sells its products through a direct-to-consumer approach across online, retail, digital media, canvassing, field marketing, and referral channels, as well as its partner network.
On August 3, 2022, RUN launched its new 40-amp Level 2 electric vehicle (EV) charger that complements its suite of home energy management solutions by offering smart features, charger settings, and control charging configuration compatible with all EV models.
As most of the EV charging is done using electricity and the utility prices are rising recently, RUN’s launch of its new EV charger will help users power their vehicles at home with abundant and affordable solar energy and deliver energy independence and cost savings, and energy stability.
RUN’s loss from operations for its fiscal 2022 second quarter ended June 30, 2022, increased 9.6% year-over-year to $155.31 million. The company’s net loss came in at $209.76 million for the quarter, up 1.7% from the year-ago period. Its loss per share decreased 70% year-over-year to $0.06. As of June 30, 2022, the company had $522.46 million in cash, down 15.4% from the end of fiscal 2021.
The consensus EPS estimate is negative for fiscal 2022 ending December 31, 2022. It missed Street EPS estimates in each of the trailing four quarters.
The stock’s trailing-12-month ROE, ROA, and ROTC are negative. Over the past week, the stock has lost 9.3% to close the last trading session at $32.77.
RUN’s weak fundamentals are reflected in its POWR Ratings. The stock has an overall F rating, which equates to a Strong Sell in our proprietary rating system.
RUN has an F grade for Value, Stability, and Quality and a D for Growth and Value. Click here to see additional ratings for RUN’s Momentum.
RUN is ranked #19 of 20 stocks in the F-rated Solar industry.
GreenPower Motor Company Inc. (GP)
Based in Vancouver, Canada, GP designs, manufactures, and distributes electric vehicles for commercial markets in the United States and Canada.
It offers a suite of high-floor and low-floor electric medium and heavy-duty vehicles, including transit buses, school buses, shuttles, cargo vans, double-decker buses, and a cab and chassis. It sells and leases its vehicles to customers directly and through distributors.
On August 3, 2022, GP announced the delivery of the first tranche of EV Star Cab and Chassis (EV Star CC) to an original equipment manufacturer and technology company Workhorse Group Inc. (WKHS), for the Production of Workhorse’s New Class 4 W750 Step Van Line.
GP’s EV Star Cab and Chassis is a purpose-built multi-utility zero-emissions vehicle with a battery pack of 118 kWh, providing a payload of 7,000 pounds and a range of 150 miles. This is a strategic milestone for both companies in building safe, reliable commercial EVs.
For its fiscal 2022 first quarter ended May 28, 2022, GP’s loss from operations came in at $4.23 million for the quarter, indicating a 103.6% year-over-year rise. GP’s net loss came in at $4.35 million, representing a 92.2% rise from the prior-year period. Its loss per share came in at $0.19, up 72.7% from the year-ago period.
As of June 30, 2022, the company had $5.43 million in cash and restricted cash, down 21.2% from the end of fiscal 2021, and had no cash equivalents.
GP’s EPS is expected to remain negative in fiscal 2023 ending March 31, 2023. The stock’s trailing-12-month ROE, ROA, and ROTC are negative. Over the past week, GP has lost 9.2% to close the last trading session at $26.82.
GP’s POWR Ratings reflect this bleak outlook. The stock has an overall F rating, equating to a Strong Sell in our proprietary rating system.
It has an F grade for Quality and a D for Growth, Value, and Stability. Click here to see the additional ratings for GP’s Sentiment and Momentum.
GP is ranked #51 of 66 stocks in the D-rated Auto & Vehicle Manufacturers industry.
PLUG shares were trading at $26.38 per share on Monday afternoon, down $0.44 (-1.64%). Year-to-date, PLUG has declined -6.55%, versus a -12.32% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market.
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