Plug It in, PLUG It In!
Great Ones, in the past I’ve had several of you ask why I favor Plug Power (Nasdaq: PLUG) over Ballard Power Systems (Nasdaq: BLDP).
As luck would have it, today we have a prime example of why I prefer Plug to Ballard, as both companies just released their Q2 earnings reports.
At first glance, both companies appear to have very similar results. Let’s take a look:
Plug Power Earnings:
- Earnings per share: -$0.30 versus -$0.21 expected.
- Revenue: $151.3 million versus $159 million expected.
Ballard Power Earnings:
- Earnings per share: -$0.19 versus -$0.12 expected.
- Revenue: $20.9 million versus $24.6 million expected.
Overall, Plug’s earnings loss was bigger, but its revenue was more than six times Ballard’s revenue.
But if you drill down further into the report, you start finding even bigger reasons to favor Plug over Ballard than just more revenue.
For instance, Ballard’s revenue fell 16% from year-ago results, while Plug’s revenue rose 21%.
Additionally, Ballard said that gross margin fell to -11% from 15% last year due to higher costs and the company’s pricing strategy.
Ballard blamed a “challenging macroeconomic outlook” for its poor performance and its weak guidance.
Meanwhile, Plug Power also mentioned economic troubles, noting that hydrogen production “continues to remain under pressure due to increased hydrogen molecule cost associated with historically higher natural gas prices and continued supplier disruptions.”
However, Plug Power backed its full-year revenue outlook, saying that it only makes about 30% of its annual revenue in the first half of the year. The second half makes up about 70% of Plug’s revenue.
Clearly, Plug Power knows the hydrogen power business better than Ballard. Basically, my favoritism boils down to better management. And today’s earnings comparison bears that out in spades.
Wall Street agrees as well, sending PLUG stock soaring more than 16% today, while BLDP gained roughly 3.3%.
To be fair — ♬ to be faaaaaaaair ♬ — RBC Capital Markets and KeyBanc both raised their price targets on PLUG, giving the stock a little extra oomph.
RBC lifted PLUG from $18 to $29 and said that the just-passed Inflation Reduction Act, which contains $370 billion in clean energy funding, will be a “catalyst to accelerate growth of the green hydrogen industry and could positively impact growth of PLUG’s product lines including electrolyzers and fuel cells.”
KeyBanc, meanwhile, boosted PLUG from $30 to $32 and also cited the Inflation Reduction Act as a catalyst for the company.
Again, to be fair — ♬ to be faaaaaaaair ♬ — this reasoning should also apply to Ballard Power, which is probably why BLDP is up today instead of selling off due to falling gross margin and poor guidance.
Maybe the Inflation Reduction Act can help Ballard overcome its poor management? I doubt it, but I’m willing to wait and see.
Until then, PLUG remains a “buy” in the Great Stuff Picks portfolio. Which reminds me … I should give you an update on the portfolio sometime soon.
Anywho, if hydrogen ain’t your thing — you heathen — and the market has you a little more conservative and on edge than usual, I’ve got just the ticket!
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Today, he’ll show you how during back testing, his proprietary “Black Ops” strategy could have made up to 3X better gains … with 4X less risk … using conservative investments!
This has nothing to do with penny stocks … crypto … or anything volatile like that. And it’s so simple to do.
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Going: Chicken Soup For The Streaming Soul
Let’s all go to the … Redbox. Let’s all go to the … Redbox.
Oh sweet, treats? Get some nachos and Milk Duds for me while you’re up.
How about, umm, chicken soup? For your soul?
I know, I’d rather pick the nachos … but nevertheless, Redbox Entertainment (Nasdaq: RDBX) is merging with Chicken Soup for the Soul Entertainment (Nasdaq: CSSE). Will they bring delicious things for investors to eat? Let’s see…
Redbox, aka the ATM-style Blockbuster outside CVS, has 38,000 kiosks across the country. Chicken Soup, on the other hand, is probably one of the few names in streaming that we’ve not mentioned thus far in Great Stuff.
Wait, what?! How long have I been inside?
Indeed. Chicken Soup isn’t just about cheesy feel-good books anymore: The company’s streaming networks include Crackle Plus, Popcornflix, Pivotshare, truli and … yup, that’s the whole list.
Oh. So that’s why I haven’t heard of it.
Combined, they will form a … well, we don’t know exactly what the duo plans to unleash upon the streaming world, but it sure ain’t “streaming Voltron” that’s for sure.
Redbox tried to make streaming work on its own but couldn’t. And given Chicken Soup’s bare bones — bare broth? — history in the video content space, I can’t see them being Redbox’s first choice to partner with.
But things get weirder when you review the terms of the deal. Investors will get 0.087 Chicken Soup shares for every Redbox share they own. However, the deal also values RDBX shares under $1. So how was Redbox stock trading for as high as $3.50 yesterday?
I can only guess that investors were hoping a bidding war would break out … for Redbox … yeah, right.
Luckily, a sense of normalcy returned to the Street today — or whatever faintly resembles normalcy in the meme-stock age. RDBX was struck down 37% on the news, while CSSE shares shot up 31% on the news.
Going: What A COIN-cidence
Oh, how the crypto coin … flips.
I know, it’s not as dramatic as the tables turning (or the turns tabling) but here we are, watching Coinbase (Nasdaq: COIN) enter the earnings confessional with such bravery … such conviction … and then leaving with its tail between its shivering legs.
Remember: Coinbase was originally in the Great Stuff Picks portfolio because it benefited from the rise in crypto trading. Obviously, this was great when crypto prices were rising, but with crypto being crypto and crypto-ing off a cliff last quarter … you can see how this exposure became a problem for Coinbase.
The company’s retail transaction revenue crashed 66% to $616.2 million last quarter, missing analysts’ targets of $667.1 million by a long shot. There were also fewer traders trading on the platform last quarter, totaling 9 million monthly transacting users — down from 9.2 million in the previous quarter.
Tell me, class: What do crypto traders do when crypto crashes?
That’s right. They hodl. Some might buy more … but they still, for better or worse, are hodling. And hodling doesn’t bring in transaction revenue. Heck, even the BlackRock deal we told you about last week has only limited upside for Coinbase for this very reason.
This, Great Ones, is why we sold Coinbase.
Sure, the NFT nonsense and “rate/rat out your fellow employees” thing added fuel to the fire. But this reliance on trading revenue — from traders who don’t want to trade frequently — is the crux of Coinbase’s kerfuffle.
Thankfully, there’s a smarter way to play the crypto shebang — and it sure isn’t buying and hodling bitcoin. Ian King tells you everything you need to know right here.
Gone: You Want A New EV? Sippin’ Clean Energy?
You gotta work … horse.
Judging by Workhorse’s (Nasdaq: WKHS) latest report … it might be time to take this ol’ gal to pasture.
The EV maker (and I use that term loosely) only made $12,555 worth of sales last quarter … waaaay below the $1.2 million it brought in this time last year. I mean, we joke about companies missing analysts’ targets all the time, but $12,555? What is that, half an EV?
I’m surprised Workhorse bothered showing up to earnings day if this is how bad things really are. It’s literally spending more on selling, general and admin expenses than it’s bringing in through EV sales. All that work just to end up with a $21.2 million net loss?
The company noted in its report that the apocalyptic results were “primarily due to a decrease in vehicle sales” … you know, Workhorse’s main business? The business that has repeatedly failed to garner big-name government contracts?
Yeah … there’s a reason for that. So how much of a “decrease in vehicle sales” are we talking here?
Well, Workhorse previously targeted 250 sales for 2022. But now? Oof, how about we bring that down to a range of 150 to 250?
Wall Street was understandably unimpressed and struck the stock down 24%, though it’s back up 10% today because ¯\_(ツ)_/¯.
Any of y’all holding WKHS stock? How about those Plug Power earnings? And what do you think about the merger between *checks notes* Redbox and Chicken Soup?
Whatever you want to ramble about, ramble on over to our inbox: GreatStuffToday@BanyanHill.com. Write to us!
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Regards,
Joseph Hargett
Editor, Great Stuff
