Ballard Power Systems Inc. (BLDP): Stock Headed for a Power Outage? 
Ballard Power Systems reported first quarter ended March 31, 2008 revenues of $16.04 million, an increase of 18% from 2007 and net loss (excluding a $96.9 million non operating gain) was $15.9 million, up 9.7% from a $14.5 million net loss in 2007. Cash was at $75.4 million as of March 31, 2008. Cash flow from operations and capital expenditures were a negative $9.2 million for the quarter.
Ballard Power Systems (BLDP) income from operations and cash flow remain in negative territory. The Company will need to obtain financing in the near term future if cash continues to be used up at its’ current rates. Ballard Power Systems is selling at $4.11 or almost 6 times 2007 revenues. If one assumes a 20% increase in 2008 revenues, the stock still sells at almost 5 times 2008 revenues. This price seems a bit too rich considering they are not generating a profit or positive cash flow. When considering the risks involved, a more reasonable price would be 2 times 2008 revenues or a stock price in the range of $1.60 to $2.00. Hydrogen fuel is a very competitive and difficult technology which at this point in time is not a cost effective alternative energy. No one knows how long it will take before this technology becomes profitable or if another technology turns out to be a more viable solution. There are more risks here than just the financials.
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