Plug Power Inc. PLUG is set to release first-quarter 2019 results on May 8, before market open.
In the last four quarters, Plug Power surpassed estimates twice for as many misses, the average negative surprise being 21.88%. In the last reported quarter, the company’s loss of 8 cents per share was wider than the Zacks Consensus Estimate of loss of 5 cents.
In the past three months, the company’s shares have increased 91.8% compared with 6.5% growth recorded by the industry it belongs to.
Let’s see how things are shaping up for this announcement.
Factors to Influence Q1 Results
Rising cost of sales and operating expenses are major concerns for the company. Increased expenses (on account of service and infrastructure) have been escalating Plug Power's aggregate costs, of late. We believe that unwarranted rise in costs might be detrimental to its first-quarter performance.
In addition, increasing liabilities are a concern for Plug Power. Notably, at the end of fourth-quarter 2018, the company’s total liabilities were $356 million. It is also experiencing increase in its interest expenses. We believe that high-debt levels, if unchecked, might inflate the company’s financial obligations and dent its profitability.
Furthermore, Plug Power’s business operations are spread across North America. Also it has a strong presence in Europe. Therefore, it is more prone to geopolitical issues. Unfavorable movement in foreign currencies might hurt its earnings in the to-be reported quarter as well.
However, the company is likely to benefit from strength in the on-road electric vehicle markets, driven by the increased adoption of hydrogen fuel cell electric vehicles. Also, the prospects of other electric vehicle markets beyond material handling remain strong, supported by modular designs like ProGen engine, leading technologies and strategic partnerships with industry partners.
Our proven model does not conclusively show an earnings beat for Plug Power in the to-be-reported quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. But that is not the case here as you will see below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Earnings ESP: Plug Power has an Earnings ESP of +15.15%, as the Most Accurate Estimate of loss of 7 cents is narrower than the Zacks Consensus Estimate of loss of 8 cents.
Plug Power, Inc. Price and EPS Surprise
Plug Power, Inc. Price and EPS Surprise | Plug Power, Inc. Quote
Zacks Rank: Plug Power carries a Zacks Rank #4 (Sell).
As it is, we caution against Sell-rated stocks (Zacks Rank #4 or 5) going into an earnings announcement, especially when the company is seeing negative estimate revisions.
Here are some companies from the same space you may want to consider as our model shows that these have the right combination of elements to beat estimates this earnings season:
DXP Enterprises, Inc. DXPE has an Earnings ESP of +2.50% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axon Enterprise, Inc AAXN has an Earnings ESP of +6.99% and a Zacks Rank #3.
Rexnord Corporation RXN has an Earnings ESP of +1.29% and a Zacks Rank #3.
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