When it comes to investing, we recommend starting with the macro picture before zeroing in on individual stocks. In other words, start with the big picture. Right now, that picture is telling us that alternative energy plays are the future. We at Insider Financial have covered this sector in-depth starting with Tesla in 2018, Ballard Power in 2016, Plug Power in 2017, FuelCell Energy in 2017, and most recently NIO, Ideanomics, Nikola, and Workhorse. Of these companies, that one notable laggard that stands out is Plug Power stock.
If you look at the 5-year chart for Plug Power stock, you see that up until this year, Plug Power stock was stuck between $1 and $3. The stock didn’t go anywhere. There are many reasons for this, but we aren’t looking to re-litigate the past.
We know many shareholders who are our subscribers and reached out to us repeatedly asking when the move was going to finally happen. Well, now that Plug Power stock has broken out to the upside, we take a look if the move is for real and how much further we think it can run.
About Plug Power Stock
First up, here’s a little background info for those of you looking at Plug Power stock for the first time. Plug Power describes itself as building the hydrogen economy as the leading provider of comprehensive hydrogen fuel cell turnkey solutions. The Company’s innovative technology powers electric motors with hydrogen fuel cells amid an ongoing paradigm shift in the power, energy, and transportation industries to address climate change and energy security, while meeting sustainability goals.
Plug Power created the first commercially viable market for hydrogen fuel cell technology. As a result, the Company has deployed over 32,000 fuel cell systems for e-mobility, more than anyone else in the world, and has become the largest buyer of liquid hydrogen, having built and operated a hydrogen highway across North America. Plug Power delivers a significant value proposition to end-customers, including meaningful environmental benefits, efficiency gains, fast fueling, and lower operational costs.
Plug Power’s vertically-integrated GenKey solution ties together all critical elements to power, fuel, and provide service to customers such as Amazon, BMW, The Southern Company, Carrefour, and Walmart. The Company is now leveraging its know-how, modular product architecture, and foundational customers to rapidly expand into other key markets including zero-emission on-road vehicles, robotics, and data centers.
CEO Andy Marsh Interview
Lately, there have been a number of things driving bullish enthusiasm around the sector and Plug Power stock. The latest news powering the stock higher is an interview with CEO Andy Marsh. The two biggest takeaways for us are:
- Through Lightning, Amazon will be putting on the road this year — both in North America and Europe — hydrogen-powered trucks powered by our fuel cells. When we look out to 2024, we believe Plug Power will be a $1.2-billion business with about $200 million of that coming from vehicles.
- In Paris and London, we are beginning to see taxis operating on hydrogen. If you have centralized refueling, it actually can be a much lower cost than electrical refueling. So it is going to be applications that are fleet vehicles, trucking, and areas like that where I think fuel cells will dominate by the end of this decade.
Bullish Analyst Projections
We are not fans of Old Wall Street and the analysts they employ. Where were they a few years ago when Plug Power stock was $1? They weren’t beating the drum to buy then, but now that it’s over $8, they are saying buy. This left a lot of money on the table, but luckily long-term holders are finally reaping the rewards for having stayed in the stock for so long. Among the recent analyst changes are:
- Plug is “a clean energy juggernaut emerging,” H.C. Wainwright proclaims in raising the stock price target to $14 from $6, citing the company’s improved guidance for 2024 revenue, EBITDA and operating income guidance of $1.2B, $250M and $210M, compared to $1B, $200M and $170M previously.
- Also, Cowen hikes its stock price target to $9 from $6, and B. Riley FBR lifts its target to $8 from $7.
- Morgan Stanley analyst Stephen Byrd raised his PT on the stock to $8.50 from $6.00 (Equalweight). He expects “rapid growth” for the energy equipment maker within the Material Handling and Fuel Cell Electric Vehicle markets, and said the company enjoys a “leading position” in hydrogen fueling infrastructure.
A lot of this enthusiasm comes from the acquisitions of United Hydrogen Group and Gliner ELX. These acquisitions are in line with the Company’s vertical integration strategy in the hydrogen business laid out in September 2019 with plans to have more than 50% of the hydrogen used to be green by 2024. These activities further enhance Plug Power’s position in the hydrogen industry with capabilities in a generation, liquefaction, and distribution of hydrogen fuel complementing its industry-leading position in the design, construction, and operation of customer-facing hydrogen fueling stations. These activities establish a clear pathway for Plug Power to transition from low-carbon to zero-carbon hydrogen solutions.
After years of underperformance, Plug Power stock looks set to keep powering higher. The recent acquisitions are a game-changer for the company. With the company’s leading technology and vertical integration, Plug Power stock deserves a much higher market cap than $2.8 billion. Nikola has a $27 billion market cap and ZERO revenues. Plug has $250 million in sales and is on track for $1.2 billion in sales within 4 years. If hydrogen becomes a major source of energy for the world, supplying it could become a larger segment of Plug Power’s business than fuel cells. All in all, Plug Power is firing on all cylinders. With 23% of the float short, the coming short squeeze could be epic. Buckle up and enjoy the ride.
As always, good luck to all (except the shorts)
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Disclosure: We have no position in NASDAQ:PLUG or any of the securities mentioned. We wrote this article ourselves and it expresses our own opinions. We are not receiving compensation for it. We have no business relationship with any company whose stock is mentioned in this article.