E Plug Power: Do Sales Justify A Sub-$2 Price Tag?

What about the balance sheet? Well although there was positive cash flow from operations in Q4, the company's liquidity looks pretty tight again. Plug has unrestricted cash of just $24.8 million at the end of 2017 and expects large losses for the first half of 2018. It also widened its loan with New York State, though total long-term debt was down over $7 million from a year ago. Still, this limited cash means that the company will have to rely on working capital improvements and a timely refinancing of Walmart leases to avoid raising more capital over the course of the year. That is a precarious position.

As far as the company's inventory position, it continued to rise during Q4, up more than 60% year-over-year to $48.8 million with a corresponding increase in accounts payable. We will be watching to see how much the company can reduce inventories as the year progresses.

Looking ahead, we have been disappointed time and again with this management team and the company. On the other, we are not blind to the immense improvements in sales. We think the data supports a stock that will be range bound, but it is a speculative buy under $2.


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