Citi Research analysts cut their rating on Plug Power (NASDAQ:PLUG) to Sell/High Risk on Friday, citing “limited corporate liquidity, dilution through ongoing ATM issuances, elusive profitability, and increasing competition.”
PLUG fell at the market open before staging a rebound. The stock was up 1.2% at the time of writing.
Plug Power issued 77 million shares at a price of $3.90 per share in February, constituting about 13% of its total shares, and Citi predicts this dilution “will continue as the company needs more cash and as profitability remains elusive.”
Moreover, in an electrolyzer market characterized by oversupply, any attempt by Plug Power to raise prices could further detrimentally affect sales or fail to take effect amidst competitive pressures, analysts noted.
Citi also downgraded Enphase Energy (NASDAQ:ENPH) to Neutral/High Risk due to “ full valuation, slower than expected recovery in the US and lower forward estimates.”
ENPH tumbled nearly 5% on the day.