3 We are sorry that green energy shares should be sold in May, while it is still possible

The last few years have seen a lot of interest in green energy stocks and the renewable energy space in general.

A flood of government investment and subsidies into the sector has helped spark investor interest. Meanwhile, disruptions abroad, such as Russia’s invasion of Ukraine, have threatened traditional fossil fuel-based energy sources. This helped further prioritize green energy solutions.

However, this momentum has now been reversed. Green energy stocks have declined over the past 18 months as government subsidies dry up. Oil and natural gas prices have fallen dramatically from their 2022 highs. Investors are placing greater emphasis on earnings and cash flow rather than revenue growth or technology potential.

These factors make it an excellent time to sell three struggling green energy companies.

Plug power supply (PLUG)

It’s time for salespeople to stop giving Connect the power (NASDAQ:PLUG) more chances. The struggling hydrogen energy company has been in business since the 1990s. Despite having plenty of opportunities to prove itself, the hydrogen fuel cell company appears to be further from profitability than ever before.

PLUG shares are down more than 99% from their all-time highs. Despite the constant stream of press releases and new developments, few of them seem to represent profitable business expansion. In fact, Plug Power has been losing money over the last ten years. Recently, the results have deteriorated. Plug Power lost over $1 billion in 2023, and losses will continue to grow in 2024.

Plug Power shares have soared in 2021 despite a lack of profitability as investors bid on all sorts of speculative green energy companies. However, once again Plug Power was unable to capitalize on the opportunity and the profits disappeared.

While Plug Power’s hydrogen product offering may have seemed innovative or promising many years ago, the technology simply has not caught on commercially. Traders should refocus their attention on more promising green energy solutions.

ChargePoint Holdings (CHPT)

ChargePoint Holdings (NYSE:CHAPTER) is a company that wants to improve the electric vehicle landscape.

Investors once focused on electric vehicle charging companies as the clear beneficiaries of a broader industry trend. As electric vehicles increase in market share, chargers should become an increasingly valuable 21st century infrastructure, in the same way that gas stations were great business in decades past.

While the basic thesis is logical and sound, there is no certainty that independent players like ChargePoint will be the ultimate winners. Electric vehicle manufacturers such as Tesla (NASDAQ:TSLA) have already built large charging networks. And existing large energy companies such as BP (NYSE:BP) have also made significant investments in charging infrastructure – they have already launched over 29,000 electric vehicle charging stations.

All this to say that while EV charging is attractive, ChargePoint doesn’t seem to be the ultimate champion here. In fact, ChargePoint’s fourth-quarter results were dismal. Revenues fell 24% year over year. The company’s adjusted EBITDA loss increased. Worst of all, ChargePoint had mid-Q1 revenue of just $105 million, compared to street estimates of $127 million.

Investors may look at a share price below $2 and decide that the stock is a worthy speculation. But don’t be fooled by the state of penny stocks. Due to the large amounts of dilution used to finance the construction of the charging network, ChargePoint’s market capitalization still exceeds $750 million. This is a huge number for a small company with declining revenues and large operating losses.

Enphasic Energy (ENPH)

Enphasic Energy (NASDAQ:ENPH) is a solar energy company. Its core technology is based on solid-state microinverters that can convert energy at the level of a single solar module. In addition to this technology, it has layered a number of other solutions in energy generation, management and storage, allowing it to offer consumers a comprehensive solar energy platform.

ENPH shares rose from below $10 per share in 2019 to a high of nearly $350 in 2022. President Biden’s Inflation Reduction Act, which authorized massive spending on projects to combat climate change, caused much excitement. and improving environmental resistance.

This bill included funding for activities such as loans and grants to support the development of utility-scale solar projects. Various U.S. states have also offered significant subsidies for rooftop solar installations, which has further strengthened the industry as a whole.

Most of these positive tailwinds have disappeared in 2023. Subsidies have started to dry up, rooftop solar companies are in crisis, and people are increasingly pulling out of solar investments due to high interest rates and economic uncertainty.

All this leads to a huge deterioration in Enphase’s future prospects. In 2023, the company generated revenue of $2.3 billion. Analysts believe they will drop to just $1.5 billion this year. And the stock is trading at more than 40 times forward earnings. With no certainty as to when subsidies will return (especially with the upcoming presidential election this year), Enphase may have a long night before the sun comes up again.

As of the date of publication, Ian Bezek did not hold (directly or indirectly) any positions in the securities mentioned in the article. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com’s Editorial Guidelines.