In this piece, we will take a look at the ten worst falling stocks to buy now.
To the new investor, the stock market can appear to be an unpredictable graph that has no inherent logic to its ups and downs. However, this is far from reality as all stock performance is primarily driven by fundamentals, market sentiment, news, large buys or sells, and other factors.
As a result, the astute investor can make money on stocks by trying to predict whether a firm has sizeable catalysts that are not accounted for in the share price. Of course, this is a risky approach, and one that isn’t recommended by Warren Buffett as we covered in 10 Best Stocks For Beginners With Little Money. However, as hindsight is 6/6, looking back into time explains a lot about how firms see their share prices drop.
Diving deeper, one doesn’t have to look far to find stocks that have struggled in the wake of shocking and disappointing fundamental performance. One of the best examples of 2024 is the 12th Best Data Center Stock To Buy According to Jefferies, Citi and Wall Street Analysts. Set up in 1968, the firm has defined the era of personal computing through its processors. Yet, in a world that’s thirsty for chips in 2024, its shares are down by a painful 52% year to date and a stunning 69% since their peak in August of 2000.
So why is this stock falling even though it has $191 billion in total assets, $25 billion in cash and equivalents, and generated $55 billion in trailing twelve month revenue? Well, the answer is simple. During its second quarter of 2024, the firm’s profit dropped by 85% annually as it posted a net loss of $1.6 billion. Its size and scale had enabled the firm to be a dividend paying stock, a fact that had helped it retain some stock value even as troubles started to become evident last year. The current dividend yield is 2.29%, but the dividends will be suspended starting Q4 as part of the firm’s $10 billion cost reduction plan.
Its shares tanked by 30% after the second quarter earnings, and investor pessimism is baked in due to the competitive nature of the semiconductor industry. The chip manufacturer has lost its lead in developing cutting edge semiconductor manufacturing technologies to a Taiwanese rival, and investors are on the sidelines as its own 18A chip process is only expected to lead to revenue in late 2025 and beyond.
Yet, even though a 52% year to date drop is bad, it doesn’t make the firm one of the worst falling stocks right now. When we consider falling stocks with a market capitalization greater than $300 million, one notable example in 2024 is an autonomous driving stock that was a billionaire hedge fund boss’s 4th best long term stock pick as of Q3 2023. The fund had first bought the stock in Q2 2021, and its shares are down by 73% year to date.
This firm manufactures light detection and radar (LiDAR) sensors that are primarily used by autonomous vehicle companies to sense their environment. As has been the case with the chip manufacturer, the firm’s troubles also have to do with its business. However, while the semiconductor industry is robust, the auto industry and particularly the electric vehicle sector have struggled due to high rates depressing prices. For this particular stock, the troubles were evident in February when the shares slipped by 10% after it announced that its biggest customer Volvo was experiencing production delays.
The woes were further exacerbated in April after a BofA note downgraded the shares to Underperform from Neutral and slashed the share price target to $1.20 from $3.50. Its stock tumbled by 16% as the analysts noted that “model launch delays and reduced volume expectations for vehicles expected to adopt LIDAR technology drive a meaningful drop in our volume forecasts.” The final nail in the proverbial coffin came in August after $16.5 million in revenue and $0.18 loss per share missed FactSet analyst estimates of $20.4 million and $0.17 million. The stock dived by another 37% and has been in the dumps since then.
Speaking of the car industry, another falling stock in 2024 was ironically the 11th best performing stock on the NASDAQ exchange in 2023 as of October 2023. The stock had posted a 288% gain by then, and in 2024, the shares are down 78.8% year to date. This firm is a lithium miner, however, it has yet to produce a profit, and operating expenses have increased right when lithium prices are at historically low levels. The lithium industry slowdown has pushed out its profit estimates for the future, and consequently, the shares have suffered.
With these details in mind, let’s take a look at the worst falling stocks to buy.
A chart showing the trend of the energy sector’s stock prices.
Our Methodology
To make our list of the worst falling stocks to buy, we ranked the 50 worst performing stocks of 2024 with a market cap greater than $300 million by their short interest as a percentage of shares outstanding. Out of these, the stocks with the highest short interest percentage were selected.
For these stocks, we also mentioned the number of hedge fund investors. Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points. (see more details here).
10. Immunocore Holdings plc (NASDAQ:IMCR)
Number of Hedge Fund Holders In Q2 2024: 24
Short Interest % of Shares Outstanding: 13.76
YTD Share Price Loss: 58.04%
Immunocore Holdings plc (NASDAQ:IMCR) is a biotechnology company that develops cancer treatments. It currently sells a treatment for melanoma and has different treatments for cancer in the development pipeline. Despite the fact that its KIMMTRAK treatment for melanoma has driven sales growth by 34% to $146 million in H1 2024, short seller sentiment is high as Immunocore Holdings plc (NASDAQ:IMCR) is yet to generate a profit. In fact, analysts don’t expect the firm to turn a profit this year or in the next, with the average 2025 EPS estimate being -$2.08. The pessimism surrounding profitability is reflected in Immunocore Holdings plc (NASDAQ:IMCR)’s product pipeline, as the firm has several drugs under trial that are costly to develop. One treatment under development is brenetafusp to help patients with treatment resistant ovarian cancer. Data shows that the treatment has a disease control rate as high as 69% which is roughly similar to Immunocore Holdings plc (NASDAQ:IMCR)’s melanoma drug. Consequently, the stock can respond favorably to progress for this drug and others, and vice versa.
During the Q2 2024 earnings call, Immunocore Holdings plc (NASDAQ:IMCR)’s management shared how KIMMTRAK sales are growing:
“We delivered $75.3 million in net revenues with KIMMTRAK in the second quarter, which is an increase of 7% compared to the first quarter. Net revenue growth was driven primarily by the U.S., where we saw an 11% growth compared to the first quarter. This growth comes from our continued focus on the community and increasing duration of therapy. We estimate we now have around 65% market share in the U.S. and believe there continues to be opportunity for further growth. In terms of penetration since launch, over 500 unique sites in the U.S. have treated patients with KIMMTRAK, most in the community.
To continue expanding our reach, we’re constantly innovating and recently rolled out our AI-enabled patient finding tool. This has allowed us to find more patients in lower density community centers while keeping our field force footprint unchanged. Our goal is to continue growing the U.S. through further market penetration and appropriately supporting duration of therapy, currently trending to 11-plus months. This is exceptional and speaks to a different mechanism of action with the benefit of KIMMTRAK extending beyond the typical RECIST response. Many patients with the best response of stable disease do well and remain on KIMMTRAK years later, contributing to the growing duration of therapy we observe.”
9. Herbalife Ltd. (NYSE:HLF)
Number of Hedge Fund Holders In Q2 2024: 29
Short Interest % of Shares Outstanding: 14.61
YTD Share Price Loss: 50.52%
Herbalife Ltd. (NYSE:HLF) is a troubled dietary supplement company based out of Los Angeles. It is a global company, which has also contributed to disappointing stock performance. Herbalife Ltd. (NYSE:HLF)’s revenue in 2023 sat at $5.06 billion marking a 2.7% annual drop from 2022’s $5.20 billion. This came on the back of a slow Chinese economy leading to a sales slowdown, as well as inflation biting into the firm’s margin. By the 2023 close, Herbalife Ltd. (NYSE:HLF)’s profit was $142 million, for a strong 56% annual drop as inflation ate into its margins. The costs also grew because of the firm’s strategy to overhaul its distributor network right when its sales were struggling – in a move similar to American Airlines’ now reversed decision to overhaul its relationship with travel agents. Herbalife Ltd. (NYSE:HLF) problems are also exacerbated by its hefty leverage. As of Q2 2024, it had a long term debt to total asset ratio of 0.96 which further stresses cash flows and limits its ability to raise finance.
Herbalife Ltd. (NYSE:HLF)’s management provided key details about its debt during the Q2 2024 earnings call:
“Since our last earnings call, we have paid down our revolver by $90 million. As a reminder of what we previously reported in April, we completed a $1.6 billion senior secured refinancing and repaid all amounts outstanding on our 2018 credit facility as well as more than half of the amount outstanding on the 2025 notes.
The net result of this transaction or these transactions is that we pushed the vast majority of our debt maturities out to 2029. With the only sizable maturity we faced prior to 2028, being the $262 million outstanding on the 2025 notes, which we remain on track to repay. And as I noted earlier, we further reduced our total leverage ratio to 3.5x as of June 30, with the goal to achieve our target of 3x by the end of 2025, following the repayment of the 2025 bonds.”
8. indie Semiconductor, Inc. (NASDAQ:INDI)
Number of Hedge Fund Holders In Q2 2024: 16
Short Interest % of Shares Outstanding: 14.80
YTD Share Price Loss: 50.26%
indie Semiconductor, Inc. (NASDAQ:INDI) is a specialty semiconductor firm that caters to the needs of the auto industry. Some of its products include sensors for autonomous vehicles and LiDAR products. This makes it unsurprising that indie Semiconductor, Inc. (NASDAQ:INDI)’s shares are down 50.26% year to date as not only have LiDAR firms struggled due to production delays at notable automakers, but the broader EV sector has also seen slowed demand. As the auto industry slows down, indie Semiconductor, Inc. (NASDAQ:INDI)’s customers have built up their inventories, which means that watching inventory levels will be a task for investors moving in the future. Any inventory draw down could translate into tailwinds for indie Semiconductor, Inc. (NASDAQ:INDI)’s shares. Fundamentally, the firm has manageable long term debt levels and its trailing twelve month revenue of $235 million marks a 5% growth over 2023’s figure of $223 million. Additionally, the firm is also diversifying its business into other sectors such as power distribution which could expand its TAM.
indie Semiconductor, Inc. (NASDAQ:INDI)’s management commented on what it’s observing in its channel w.r.t inventory during the Q2 2024 investor call:
“So, as we said in the prepared remarks, we are seeing the inventory situation significantly improving, and that was certainly the case through Q2. It did persevere a little longer than we expected. But at this point, we’re seeing general recovery from the inventory situation. And we do expect that that will allow us a little more flexibility going forward into the second-half of the year.”
7. Symbotic Inc. (NASDAQ:SYM)
Number of Hedge Fund Holders In Q2 2024: 29
Short Interest % of Shares Outstanding: 15.42
YTD Share Price Loss: 52.40%
Symbotic Inc. (NASDAQ:SYM) is a specialty technology company that focuses on the needs of the logistics industry. It is targeting the high end niche of the warehouse industry by offering products such as automation through robots. This means that Symbotic Inc. (NASDAQ:SYM) is exposed to economic headwinds more than the broader logistics industry. While logistics as a whole performs well during a robust economy since volumes are high, businesses typically invest in technologies such as robots when they have ample cash flow at hand. Consequently, investors place a high premium on growth as part of Symbotic Inc. (NASDAQ:SYM)’s hypothesis, which was evident in the aftermath of its Q3 results. As part of the earnings release, it shared that Q4 revenue would sit at a midpoint of $465 million, which was 10% shy of Wall Street’s estimate of $517 million. Symbotic Inc. (NASDAQ:SYM) has suffered because of higher construction costs and labor problems, and while it has a strong $22.8 billion order backlog, this is primarily due to orders from Walmart and GreenBox.
Symbotic Inc. (NASDAQ:SYM)’s management shared its expectations for the rest of the year during the Q3 2024 earnings call:
“As you recall, two years ago, we embarked on a strategy to outsource much of the manufacturing and installation of our systems. This approach enabled us to scale at a rapid pace. Based on our key learnings over multiple deployments, we plan to reabsorb a portion of the construction management processing starting this quarter, which will reduce costs. We believe bringing some of these functions back in-house will help us put a sharper focus on the implementation process and reduce costs further. In the short term, our revenue growth may slow as we make these changes. Our backlog demonstrates that demand continues to be very strong for our systems, but we will always prioritize execution on existing deployments ahead of chasing growth. On the innovation front, we made important progress on a new minibot that will populate our second breakpack installation and advance our non-ambient system development work.
We also began deployment of the first Symbiotic system for GreenBox. While this did not contribute a significant amount of revenue in the quarter, the GreenBox deployment is on schedule. I’m confident that we are making the right choices to quickly return to higher system gross margin and faster growth.”
6. Compass Minerals International, Inc. (NYSE:CMP)
Number of Hedge Fund Holders In Q2 2024: 24
Short Interest % of Shares Outstanding: 16.17
YTD Share Price Loss: 55.84%
Compass Minerals International, Inc. (NYSE:CMP) is a diversified industrial raw materials company that caters to the needs of the construction, chemical, and agriculture industries. Its poor performance on the market, as evidenced by a 55.84% year to date share price drop is both due to factors out of and in the firm’s control. Compass Minerals International, Inc. (NYSE:CMP) is yet to file its Form 10Q for the second quarter with the SEC, and consequently, it has received default notices from lenders. On the business front, the firm has seen its salt revenue drop due to milder weather, and it has also seen new executive appointments by bringing CFO, COO, and a new Corporate Controller on board. Additionally, Compass Minerals International, Inc. (NYSE:CMP) had decided to pivot to lithium production in 2023, but regulatory concerns forced it to stop. This decision led to a $77 million expense, and woes worsened in 2024 when the Forest Service found fire retardants sold by a Compass Minerals International, Inc. (NYSE:CMP) business caused tanker corrosion. This led to future sales of the chemicals being suspended. The firm is also facing litigation related to the forest business.
Consequently, Cove Street Capital’s commentary for Compass Minerals International, Inc. (NYSE:CMP) was quite hard hitting during the Q2 2024 investor letter:
“We have reset our position in Compass Minerals International, Inc. (NYSE:CMP) to 2.5% from 5%. The valuation being accorded to its two “irreplaceable” U.S. assets in salt and sulfate of potash are worth multiples of the current value of the stock, but weather headwinds have sucked the life out of the equity. Said another way, the company has been idiotically run and managed with a mindset that weather is NOT an issue in agriculture and de-icing salt and that has cost us dearly to date. A 72-year-old Board member has stepped in as CEO with a very obvious mission: reduce costs and sell the company. We again would note the Koch family paying $36 per share for a 17% share in the company, among other unhappy people.”
5. Riot Blockchain, Inc. (NASDAQ:RIOT)
Number of Hedge Fund Holders In Q2 2024: 12
Short Interest % of Shares Outstanding: 16.52
YTD Share Price Loss: 51.14%
Riot Blockchain, Inc. (NASDAQ:RIOT) is a Bitcoin mining company based in Castle Rock, Colorado. The firm has been at the center of news coverage in form or another in 2024. Riot Blockchain, Inc. (NASDAQ:RIOT) made a big announcement in May when it announced an acquisition offer for Bitfarm. The team aimed to make the firm the biggest Bitcoin miner in the world with a power capacity of 1.5 GW and a hash rate of 52 EH/s. However, Bitfarm rejected the offer, but ongoing negotiations led to the two announcing an agreement in September that saw a Bitfarm founder step down and Riot Blockchain, Inc. (NASDAQ:RIOT) agreed to withdraw its requisition. The stock has suffered this year also due to the impact of a short seller report in June which accused the firm of burning cash. Cash is important for the firm as it is targeting aggressive expansion by ordering more than 60,000 miners and setting up substations with more than 100MW of capacity. Riot Blockchain, Inc. (NASDAQ:RIOT)’s 400MW substation also suffered from a delay earlier this year, and these moves have stemmed from its revenue dropping because of Bitcoin’s halving in 2024.
During its Q2 2024 earnings call, Riot Blockchain, Inc. (NASDAQ:RIOT)’s management shared how it’s navigating through a tough environment:
“However, driven by the significant growth in our hash rate capacity expected through the remainder of the year, we anticipate producing more Bitcoin per day by the end of 2024 than we did in the first quarter of 2024, halving non-withstanding. Riot ended the second quarter of 2024 with 9,334 Bitcoin, an increase of 28% relative to the 7,265 Bitcoin that we held at the end of the second quarter of 2023. Riot continued to retain 100% of all Bitcoin produced in the second quarter. In the second quarter of 2024, Riot reported total revenue of $70 million as compared to $76.7 million for the second quarter of 2023, a 9% decrease year-over-year. This decrease was primarily driven by lower revenue at the company’s engineering division. During the quarter, Riot reclassified third-party hosting revenues and costs into other from Bitcoin mining, as previously reported in the first quarter of 2024.”
4. Aehr Test Systems (NASDAQ:AEHR)
Number of Hedge Fund Holders In Q2 2024: 12
Short Interest % of Shares Outstanding: 17.19
YTD Share Price Loss: 51%
Aehr Test Systems (NASDAQ:AEHR) is a backend semiconductor company that provides wafer, die, and package testing equipment. Its products are used primarily to test silicon carbide wafers, energy storage silicon, and power management chips. Consequently, the firm has faced a tough time in 2024 as broader industrial use cases of semiconductors have slowed down because of weak industrial output. Silicon Carbide products are used extensively in the EV industry, and the slowdown in this sector coupled with little AI exposure has meant that despite being a semiconductor stock, Aehr Test Systems (NASDAQ:AEHR)’s shares are down 51% year to date. The latest sell off was sparked in August after the firm completed an acquisition of a private California company that specializes in testing AI chips. Investors weren’t impressed though, but they did reward Aehr Test Systems (NASDAQ:AEHR) stock with a 5% price gain in September after it announced a new deal for AI chip package testing solutions. However, the stock is yet to retake its high reached when the firm announced the deal on July 16th.
Aehr Test Systems (NASDAQ:AEHR)’s management commented on the acquisition during the Q2 2024 earnings call. Here is what they said:
“I’m personally very excited and proud to announce today our acquisition plans for Incal Technology, a manufacturer of highly acclaimed reliability test and burn-in solutions of a wide range of semiconductor devices and markets.
They have a particularly strong new product family of ultra-high-power test solutions for AI accelerators, graphics and network processors, and high-performance computing processors. Their ultra-high-power package for our test capabilities, combined with Aehr’s industry-leading lineup of wafer-level test and reliability solutions, uniquely position us to fully capitalize on the rapidly growing opportunity within the AI semiconductor market, as a turnkey provider, a reliability and test that spans from engineering to high-volume production. Incal is in a unique position with intimate knowledge and working relationships with a significant number of AI-industry leaders, providing a front row seat to the technology needs of those customers. They’re shipping systems today for use by a broad range of companies with many of these companies projecting needs to move to high volume production level burn-in of these devices.
Both Aehr and Incal believe there’s a tremendous opportunity to grow this business substantially. Incal has world-class system hardware and software architectures and customers that have a high degree of customer loyalty for their products. Aehr brings worldwide sales and support infrastructure, as well as high value manufacturing capacity and capabilities that together we feel will quickly address customer demand of very high global growth rate of AI and other high-power semiconductors. We also bring R&D resources, technology and processes, and the financial resources to be able to enhance and accelerate new needs that customers may ask for. This unique combination strongly positions us to capitalize on the significant opportunity within the AI market.”
3. Scholar Rock Holding Corporation (NASDAQ:SRRK)
Number of Hedge Fund Holders In Q2 2024: 30
Short Interest % of Shares Outstanding: 19.98
YTD Share Price Loss: 50.63%
Scholar Rock Holding Corporation (NASDAQ:SRRK) is a biotechnology company developing treatments for muscular atrophy, cancer, fibrosis, and other ailments. It is a risky stock since the firm does not generate revenue through any commercial drugs. This means that Scholar Rock Holding Corporation (NASDAQ:SRRK)’s hypothesis is dependent on its ability to use cash to fund its under trial drugs. The firm’s operating expenses during Q2 2024 were $59.4 million while its cash and equivalents were $93 million. This means that Scholar Rock Holding Corporation (NASDAQ:SRRK) has less than two quarters of runway before it has to liquidate short term instruments to fund its business. However, there has been positive news on the pipeline front as Scholar Rock Holding Corporation (NASDAQ:SRRK) reported in August that participants in a trial of its apitegromab drug for muscular atrophy showed promising results as 90% of participants had improved their motor skills over 48 months. Investors rewarded the news with the stock soaring by 18% over the next couple of days.
Scholar Rock Holding Corporation (NASDAQ:SRRK)’s management shared details about its drugs during the Q2 2024 earnings call. Here is what it said:
“In addition to the sustained functional improvement, the updated data continued to reinforce the safety and tolerability of apitegromab with over 90% remaining on treatment and no new safety findings. Taking together, the 48-month data further reinforce our confidence in the SAPHIRE study and the potential for apitegromab to improve the lives of those living with SMA. A successful SAPHIRE study will allow serve as the foundation for building a neuromuscular franchise, and we are planning to extend our efforts in estimated children under 2, as well as expanding into other neuromuscular indications. For our cardiometabolic programs, we believe our highly selective approach to blocking the pro and latent forms of myostatin can meaningfully contribute to healthy weight loss management.
We formally announced our entry into the cardiometabolic area less than 10 months ago, and we’ve wasted no time in moving our programs forward. Starting with EMBRAZE, our randomized Phase 2 proof of concept study in obesity, assessing apitegromab in combination with a GLP-1 agonist, it is ahead of schedule and we are now positioned to complete enrollment in early Q4 and have updated our guidance for the top-line results to Q2 2025. As you’ll hear from Moe, the non-clinical data generated to date with SRK-439, our novel anti-myostatin, continues to support a potential best-in-class approach for preserving muscle mass leading to healthy weight loss management. The data presented at ADA add to the body of evidence, demonstrating an increase in lean mass and reduced fat mass regain with SRK-439 following withdrawal of the GLP-1 receptor agonist.”
2. AMC Networks Inc. (NASDAQ:AMCX)
Number of Hedge Fund Holders In Q2 2024: 15
Short Interest % of Shares Outstanding: 24.61
YTD Share Price Loss: 60%
AMC Networks Inc. (NASDAQ:AMCX) is a media and entertainment company that distributes BBC America, AMC, and other networks. Its reliance on the media industry for its revenue means that the firm is dependent to a large extent on advertiser revenue for its sales. Consequently, slower ad spending in 2024 due to higher rates and a tough business environment has also led to AMC Networks Inc. (NASDAQ:AMCX)’s stock being down by 60% year to date. The firm’s shares tanked by a whopping 37% in June after it announced a $125 million offering of convertible private notes. This spooked investors as not only do convertible notes carry the chance of valuation dilution through their conversion into shares but also because they threaten to eat into cash flow due to high interest rates. For AMC Networks Inc. (NASDAQ:AMCX), a firm that reported a 17% annual revenue drop in Q1 before the notes announcement, the decision was ill fated. This is especially true as networks struggle to compete with streaming services, and AMC Networks Inc. (NASDAQ:AMCX) lacks the heft of bigger players to enter into mega deals to boost viewers.
AMC Networks Inc. (NASDAQ:AMCX)’s management is targeting streaming amidst the turmoil. Here’s what it shared during the Q2 2024 earnings call:
“Our overall strategic approach is evident in our new branded distribution partnership with Netflix, featuring prior seasons of 15 AMC shows on the number one streaming platform in the world. This non-exclusive licensing agreement will give the vast US audience of Netflix subscribers access to our high quality, critically acclaimed content, with the AMC brand clearly represented. We believe that finding a bigger stage for our shows will be a big win for our own platforms and existing distribution partners. Years ago, Breaking Bad demonstrated the power of Netflix to help build awareness and interest in a series that was still launching new seasons on AMC.
We’re looking forward to seeing our core franchises and most important current shows tap into this same powerful engine for audience expansion. Unique partnerships like this demonstrate that AMC Networks is an innovative and nimble company unencumbered by the constraints and limited options facing others in our industry. We have the freedom to work with anyone, and we have a continued commitment to nurturing strong brands and quality storytelling supported by a sustainable and predictable wholesale business model. In addition to new content partnerships, we’re growing distribution of our linear networks and AMC Plus through new internet delivered skinny bundles.”
1. Plug Power Inc. (NASDAQ:PLUG)
Number of Hedge Fund Holders In Q2 2024: 15
Short Interest % of Shares Outstanding: 28.39
YTD Share Price Loss: 54.6%
Plug Power Inc. (NASDAQ:PLUG) is a clean energy company that focuses on products that use hydrogen. As a result, it’s unsurprising that the stock is down 56% year to date as the broader clean energy sector has struggled. Hydrogen is a relative niche in clean transportation products, which doesn’t bode well for Plug Power Inc. (NASDAQ:PLUG) as capital for the industry dries up. This slowdown is also evident in Plug Power Inc. (NASDAQ:PLUG)’s financials, as the firm’s loss widened to $262 million in Q2 from $236 million in the year ago quarter. Additionally, investors have also factored in a potential change in the US Administration after the November election, which could affect government support for the company’s projects. Plug Power Inc. (NASDAQ:PLUG)’s shares have been troubled in 2024 as a $200 million equity offering caused a 10% drop in July. It dipped by another in August after second quarter revenue was $143 million and loss per share was $0.36, both of which missed FactSet estimates of $185 million and $0.31. Given that analysts expect Plug Power Inc. (NASDAQ:PLUG) to hit profitability in 2028 after it generates $4 billion in revenue, the headwinds are unsurprising.
Plug Power Inc. (NASDAQ:PLUG)’s management shared key details about its revenue during the Q2 2024 earnings call:
“Looking at Q2, more specifically, we have made progress on our sales, cost down and cash management initiatives. And I would highlight as an example, the level of electrolyzers deployed, which represents a clear inflection point on this ramping activity. But these new nascent offerings with nuanced commercial contracts and products being used in much larger customer project deployments makes it challenging on the timing on revenue recognition. On a positive, as Andy mentioned, for the majority of the programs deployed where the revenue will be recognized in the second half, we’ve already delivered. We’ve transferred the title and collected most of the cash via milestones. So this is truly a factor of timing. In addition, this large quantity of programs provides a substantial base of experience and insight to accelerate deployments based on learnings and the ability to constructively improve commercial terms to benefit the company financially and to enhance the accounting of these activities.”
PLUS is the worst falling stock to buy. But our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than PLUG but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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