In a major step for the power cell company, Plug Power (PLUG, Financial) announced an MSA agreement with a global footwear manufacturer in North America outlining the specific terms for purchasing and site requirements for deploying the GenKey hydrogen and fuel cell solution. Post the announcement shares of Plug Power Inc. rose 4.46% during the morning session on Wednesday.
Plug Power will be releasing the alternative energy fuel cells at 3 of the footwear manufacturer’s distribution centres and will be focusing on expansion plans that involve more launches at 30 of the footwear manufacturers’ global branches.
CEO’s view
According to Plug Power CEO, Andy Marsh, ‘"Plug Power continues to grow our customer base with important partnerships and meaningful relationships. We've proven the value of our solutions to repeat customers like Walmart (WMT, Financial), Kroger (KR, Financial) and BMW (BAMXY, Financial), and we intend to do the same with this new GenKey customer. Plug Power understands that the GenKey solution is impactful to customers who are moving their organizations toward more sustainable power options. Our hydrogen and fuel cell services enable customers to implement an efficient green power solution for their lift trucks that addresses a key issue for this new customer. We're confident they will see positive results in their environmental impact, as well as their bottom line."
Company profile
Plug Power Inc is in the business of technology dealing with alternative energy. Founded in 1997, the Latham, New York based company engages in designing of, development, manufacturing and commercial reselling of fuel cell systems for the industrial markets globally. The company focuses on PEM fuel cells and processing processes and methodologies with a product line that includes GenKey, a turn-key process for manoeuvring vehicles to fuel cell power, GenDrive that is a PEM fuel cell system fuelled by Hydrogen providing power to material handling vehicles and ReliOn which is a stationary fuel cell process providing scalable PEM fuel cell power. Selling via a direct product sales force, Plug Power provides cell power to support the backup power requirements of the utility, telecommunications and transportation sectors.
Analysis
The US electrical equipment industry is separated into two divisions: heavy electrical equipment and electrical components & equipment. The electrical components & equipment segment includes small-scale electrical equipment manufacturers like motors, cooling systems and related equipment. There are 2000 electrical equipment companies operating in the industry. Being cyclical in nature, the industry and manufacturers market their products to manufacturing industries as well as the construction industry. The major players in the industry are ABB (ABB, Financial), Cooper Industries (CBE, Financial), Rockwell Automation (ROK, Financial), Ametek (AME, Financial) and Roper Industries (ROP, Financial).
The company has seen a drop in net operating cash flow of -$13.65 million or 53.52% when compared y-o-y. The company’s cash generation rate is significantly lower than the industry average. The past fiscal year saw Plug Power lose money by earning -$0.65 against -$0.79 in the previous year.
Analysts are giving Plug Power Inc. a SELL rating. This analysis is driven by a few factors that will have a greater impact on the stock’s performance than any of its strengths and would make it difficult for investors to get any positive results out of the stock. Plug Power’s weaknesses are seen in various areas such as a weak operating cash flow and a historically bad performing stock.
