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(Bloomberg) -- Plug Power Inc.’s accounting errors sent shares of the fuel-cell maker plunging on Wednesday.The Latham, New York-based company, which soared more than 1,400% in the past year through Tuesday, tumbled about 8%. Its industry counterparts Ballard Power Systems Inc. and FuelCell Energy Inc. rose. Plug Power said it found accounting errors in results for 2018, 2019 and the first three quarters of 2020. But Chief Executive Officer Andy Marsh, speaking at a conference Wednesday, said the errors didn’t affect the company’s underlying business.“The changes we’re experience change nothing about our future,” Marsh said at the Roth Capital Partners annual conference. “It has no impact on the green hydrogen network we’re building out, or with our partnerships.”The disclosure is a setback for the company, which has struck a series of partnerships with companies such as Renault SA and South Korea’s SK Group. It also came at a time when growth stocks have been hit by the climb in bond yields. The WilderHill Clean Energy Index is up about 1% this year, following a surge of more than 200% in 2020.“Anytime a company needs to restate results, investors shoot first and ask questions later,” said Jeffrey Osborne, a New York-based analyst at Cowen, who maintained a buy-equivalent rating, with a price target of $75 for the shares.In a filing Tuesday, Plug Power reported that it found accounting errors in results for 2018, 2019 and the first three quarters of 2020. They involved the book value of “right of use assets,” loss accruals for service contracts, impairment of long-lived assets and expenses previously counted under research and development.At the Roth conference Wednesday, Marsh said the company in 2018 adopted accounting methods for lease-back agreements after consulting with outside firms, and those methods passed muster with Plug Power’s auditors for the next two years. But the company’s auditors have since decided the accounting needs to change, he said.“In these emerging industries, when you’re the first one to do anything, as Plug Power is, accounting can certainly be tricky, because there’s no model you can look at and say ‘I’m going to do it like the company down the street does it,’” Marsh said. He acknowledged Tuesday’s announcement was “surprising and disappointing for investors.”B. Riley’s Christopher Souther sees a buying opportunity for Plug Power, while Truist Securities downgraded Plug to a hold recommendation.“Following these disclosures, we expect limited opportunity for outperformance in the near-term,” Truist Securities’ analysts said in a note to clients. “While the company reiterated long-term targets and the accounting issues appear transitory in nature, we see limited upside until resolution.”Plug Power has successfully raised capital in the last year, though its forward revenue targets could face headwinds as competition looms, according to Peter McNally, global head for industrials, materials and energy at Third Bridge Group in New York.“The future for Plug depends on broadening their customer base and their product line, and the company needs to invest to get there,” he said. “The good news is that the company has never been this well capitalized in its history.”It isn’t the first time a major fuel-cell stock has been rocked by accounting errors. Last March, Bloom Energy Corp. tumbled to $3 per share from more than $14 earlier in the year after restating its revenue downward for 2018 and 2019. The stock quickly recovered and soared to $42.65 last month before pulling back.See more: Clean Tech Valuations Are Wildly Out of Sync With Company ProfitDespite the selloff on Wednesday, Plug Power is still up about 16% in 2021 -- compared with an advance of almost 6% for the S&P 500.Investors piled into alternative energy stocks leading into President Joe Biden’s victory, and are now facing concern over high-flying valuations. Hydrogen, which can be generated and used without producing greenhouse gases, has been touted as an alternative form of energy, while some participants remain unconvinced. Carlyle International Energy Partners recently called hydrogen power a “bubble.”(Corrects stock direction in first and second paragraphs)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.

Published On: Tue, 16 Mar 2021 18:40:10 GMT