Back in the eighties, a book called The Goal was released. While it’s made a lot of difference for a lot of readers over the years, one part in particular stuck with me. One character, when talking about cash flow, noted that when you have enough, all is well. When you don’t, it’s only a matter of time until the whole thing falls apart. Cash flow is the lifeblood of a business, and that’s what makes word from green hydrogen stock Plug Power (NASDAQ:PLUG) disastrous enough to send share prices down over 44% in Friday afternoon’s trading.
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Not only was Plug Power’s third-quarter earnings report a debacle, but it’s what happened after that word emerged that really got investors concerned. Plug Power issued a “going concern” notice that suggests it may run out of cash altogether over the next year. Its projections noted that “existing cash and available for sale and equity securities will not be sufficient to fund operations through the next 12 months.”
That’s bad news, but there may be some hope ahead. One report suggests that Plug Power is looking for a little government help here, starting with a tax credit and carrying on to a potential loan to get it through the latest rough patch. Thankfully, Plug Power already settled one tax issue with Bethlehem, New York.
That issue featured the valuation of a facility that had been recently established there, which was assessed at a value of $37.5 million. Following a court case, the assessment was reduced to $24 million instead. Since Plug Power pays the property taxes as part of its leasing agreement, the move lowers that bill substantially.
Is Plug Power a Buy or Sell?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on PLUG stock based on 11 Buys and 13 Holds assigned in the past three months, as indicated by the graphic below. Furthermore, the average PLUG price target of $11.85 per share implies 255.86% upside potential.
