Amid growing interest in alternative energy sources, hydrogen energy is showing promising advancements, particularly in the automotive sector, which expects to see an influx of hydrogen-powered trucks by 2035. Plug Power (PLUG) is well-positioned to benefit from the significant investment needed to develop the much-needed hydrogen-based infrastructure. The company is focused on expanding electrolyzer capacity and the global deployment of hydrogen refueling stations. Also, recent news regarding the company’s new contracts has sparked a short rally for the stock, rising 28% in the last month.
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Plug has recently secured significant contracts and funding, primarily with Allied Green Ammonia in Australia and Carreras Grupo Logístico in Spain, as well as from the U.S. Department of Energy. These collaborations indicate a steadfast commitment to furthering hydrogen technology, making the stock a potentially compelling option in the hydrogen energy industry.
Plug Secures Key Contracts
Plug Power is a pioneer in the hydrogen fuel cell technology market, constructing a comprehensive green hydrogen ecosystem. The company is focused on assisting customers in achieving their business objectives while supporting the decarbonization of the economy. Its impressive portfolio includes more than 69,000 fuel cell systems and over 250 fueling stations, making it the world’s leading deployer of these systems and the largest buyer of liquid hydrogen.
The company recently announced an agreement with Allied Green Ammonia to provide electrolyzer capacity for its green hydrogen to the ammonia plant in Australia. The partnership aims to create one of the world’s largest green ammonia production facilities and is expected to produce approximately 2,700 metric tons daily. The company is also collaborating with Carreras Grupo Logístico to establish the first hydrogen-powered logistics site in Spain, focusing on replacing battery-powered forklifts with hydrogen fuel cells to improve energy efficiency and reduce operational costs.
In addition to these partnerships, Plug Power has established an equipment leasing platform targeting over $150 million to support equipment sales growth. The U.S. Department of Energy awarded $10 million to develop next-generation hydrogen refueling infrastructure for medium and heavy-duty vehicles.
Analysis of Plug Power’s Recent Financial Results
The company recently posted its Q2 2024 financial results. Revenue for the period was $143.35 million, which fell short of analysts’ expectations of $188.15 million. Despite this, the firm’s revenue still reflects growth in electrolyzer deployments and improved pricing on fuel and other product lines. The firm saw hydrogen margins improve thanks to increased production capacity at the Georgia plant and strategic price increases across the hydrogen product portfolio.
However, the company reported a net loss of $262.3 million, driving an earnings per share (EPS) loss of -$0.36, which fell short of analysts’ estimates of -$0.31.
What Is the Price Target for PLUG Stock?
The stock had been on a downtrend until recently, rebounding roughly 28% in the past month. It trades near the low end of its 52-week price range of $1.60 – $7.90, with a P/S ratio of 1.9x. This roughly aligns with the Electrical Equipment & Parts industry average of 2.05x.
Analysts following the company have taken a cautious stance on the stock. For example, Jefferies analyst Dushyant Ailani recently reiterated a Hold rating on the shares while lowering the price target from $2.20 to $2. He noted that the shares will likely remain under pressure in the near term as market participants await a 2025 outlook.
Plug Power is rated a Hold overall, based on 14 analysts’ recommendations. The average price target for PLUG stock is $4.09, representing a potential upside of 100.49% from current levels.
PLUG in Summary
In an era where green energy solutions are increasingly becoming sought after, Plug Power is making strides in hydrogen fuel cell technology. The company is making significant progress in the global deployment of hydrogen refueling stations and has recently secured vital contracts driving future growth. Despite recent financial shortfalls, Plug Power’s commitment to expand its green hydrogen ecosystem makes it a potentially appealing choice for investors within the alternative energy space.
