Plug Power (NASDAQ:PLUG) might have reported record sales for 4Q22 but that was not enough to subsequently stave off the bears, as the hydrogen specialist’s results fell short of Street expectations.
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In Q4, revenue rose by 36.3% year-over-year to $220.7 million, yet still coming in $48 million below the consensus estimate. And while gross margins improved from the negative 54% showed during the same period last year, they still came in at negative 36% as Plug Power racked up an operating loss of $680 million in 2022.
The company restated it remains on track to generate revenues of $1.4 billion in FY2023, above the analysts’ forecast of $1.36 billion while PLUG also anticipates generating a 10% gross margin but that did little change the outcome far as investors were concerned.
“The company continues to navigate a challenging macro environment while building its multiple product verticals to position itself for long-term growth,” wrote Canaccord analyst George Gianarikas’ in a research note reviewing the earnings.
Interestingly, on one subject not specifically tied to the company, Gianarikas thinks comments made elsewhere last week could also provide a tailwind. At Tesla’s Investor Day, “notorious hydrogen bear” Elon Musk gave green hydrogen some credit and conceded that it has a role to play in helping the world move to a sustainable energy future. Musk acknowledged the world needs hydrogen to “decarbonize the materials and chemical refining processes,” although he stressed that hydrogen-based transport is not in the cards.
In any case, right now there are too many variables for Gianarikas to fully get on board.
“We continue to be enthusiastic about the prospects of the green hydrogen ecosystem, particularly considering robust Inflation Reduction Act incentives and Mr. Musk’s comments,” the analyst said. “However, we seek further validation of the long-term green hydrogen market and await some execution of operational milestones before becoming more bullish on the stock.”
Accordingly, Gianarikas rates PLUG shares a Hold (i.e. Neutral) while his $15 price target suggests the shares will climb 12% higher in the months ahead. (To watch Gianarikas’ track record, click here)
That said, on Wall Street Gianarikas is amongst a minority; 4 other analysts join him on the sidelines, but with an additional 15 Buys, the stock garners a Strong Buy consensus rating. Moreover, the average target remains an upbeat one; at $25.65, the figure makes room for 12-month gains of ~91%. (See PLUG stock forecast)
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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.
