Plug Power is under the microscope ahead of earnings; Here’s what to expect

It’s almost time for Plug Power (PLUG) to join the earnings party. Once the market action concludes today, the hydrogen specialist will deliver its latest quarterly report.

The stock has been under pressure recently, having shed 24% over the past month alone. The pullback to a large extent is the result of the company lowering full year expectations midway through October. PLUG now expects to complete several large projects in 2023 instead of this year, and the company said it sees revenue for 2022 coming in 5% to 10% below the $900 million to $925 million it anticipated back in August.

This caused some readjustments to Truist analyst Bronson Fleig, who reduced his 2022 revenue forecast from $912 million to $848 million. However, the analyst expects the revenue haul from the delayed projects will shift to 2023 and has increased the revenue estimate for next year to $1.63 billion from the prior $1.57 billion. “We believe the lower ’22 outlook is not indicative of demand destruction for PLUG’s H2 products, rather a challenged supply chain backdrop,” the analyst commented.

As for Q3, Fleig is expecting $254 million in revenues and a gross margin of -5%. The Street has $258 million and -4%, respectively.

Elsewhere, PLUG recently pointed out how it stands to gain from the production tax credit (PTC) in the Inflation Reduction Act (IRA), which according to the company sets up green H2 as “more economical” than any form of grey H2 and should result in “lower TCO (total cost of ownership) across the H2 application ecosystem.”

The fact the company is “best positioned” amongst peers to reap the IRA benefits and those of other policies is “well understood by the market,” says Fleig. However, PLUG still has plenty to prove to come good on it promises.

“Considering the outsized role green H2 and electrolyzers play in PLUG’s new ’26-’30 outlook (approx. 60% – 70% of revenue in out-years), in order to boost investor confidence in these long-term targets we believe the market will need to see steady progress on incremental offtake agreements and large scale electrolyzer orders,” the analyst summed up.

For now, Fleig sticks with a Hold (i.e., Neutral) rating although he might as well have said Buy, as his price target stands at $32, suggesting shares have room for 115% growth in the year ahead. (To watch Fleig’s track record, click here)

Looking at the consensus breakdown, with 13 Buys and 6 Holds, the analysts’ view is that this stock is a Moderate Buy. The Street’s average target is practically the same as Fleig’s objective. (See Plug Power stock forecast on TipRanks)

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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.