Down 88% From All-Time Highs, Is Plug Power Stock a Buy In April 2023?
April 12 2023 - 6:21AM
Finscreener.org
Plug Power (NASDAQ:
PLUG) is a leading
provider of hydrogen fuel cell solutions for the electric mobility
and stationary power markets. It designs, develops, and
manufactures hydrogen fuel cell systems that replace traditional
batteries in electric vehicles and stationary power applications.
Plug Power has an extensive customer base across various
industries, including material handling, on-road electric vehicles,
and backup power generation.
Valued at a market cap of $6.3
billion, Plug Power stock is down 88% from all-time highs. Let’s
see if it makes sense to invest in PLUG stock right now.
Is Plug Power stock a buy, sell, or hold?
Plug Power has shown robust
revenue growth in recent years, with revenue increasing from $230
million in 2019 to $502 million in 2021 and further to $701 million
in 2022. However, the company is yet to turn a profit, with
operating losses of $658 million, $415 million, and $576 million in
2022, 2021, and 2020, respectively.
Plug PowerU+02019s R&D
expenses have also increased over the years, reflecting the
companyU+02019s focus on innovation and product development.
Additionally, its operating expenses have risen from $78 million in
2019 to over $450 million in 2022.
Plug PowerU+02019s balance sheet
is healthy, with cash and cash equivalents of $2.2 billion and debt
of $900 million as of December 2022.
The company explains, “We have
applied our suite of turnkey solutions to a large and growing first
market in material handling, including blue chip customers in North
America and Europe. Our continued focus on product development
drives us towards profitability and provides flexibility to pivot
into adjacent markets as well as new applications and
geographies.”
In March 2021, Plug Power
announced a $1.5 billion joint venture with South Korean
conglomerate SK Group to develop hydrogen fuel cell solutions for
the Asian market. The joint venture aims to sell 500,000 fuel cell
systems and establish 15 hydrogen refueling stations in South Korea
by 2025.
In January 2021, Plug Power
announced a partnership with French car manufacturer Renault to
develop fuel cell-powered light commercial vehicles for the
European market. The companies aim to develop, manufacture, and
sell fuel cell systems and vehicles by 2024.
What next for Plug Power stock price and
investors?
Plug Power is the first company to create a market for
hydrogen fuel cell technology. With more than 150 patents, it has
increased sales by 8x in the last ten years. It quickly identified
a market for material handling companies as Plug Power’s fuel cells
now power more than 40,000 forklifts. It is now looking to expand
its footprint across verticals such as transport, stationary and
portable applications.
The company aims to increase
green hydrogen production to 500 tons per day by 2025, up from just
9.1 tons per day in 2022. It expects to end 2023 with sales of $1.4
billion and a gross margin of 10%. Due to economies of scale and
rapid expansion goals, Plug Power estimates revenue to touch $5
billion in 2026, with gross margins of 30% and an operating margin
of 17%.
The final
takeaway
While Plug PowerU+02019s
financials may not be strong enough to support a profitable
investment at this time, the companyU+02019s technology and focus
on sustainability make it a promising option for the long
term.
Plug PowerU+02019s partnerships
and collaborations with major players in the automotive industry
demonstrate the potential for future growth and
expansion.
Investors should consider Plug
Power as a high-risk, high-reward investment opportunity with
significant potential upside. However, it is important to note the
companyU+02019s current financial situation and potential risks,
such as increasing competition and regulatory changes in the clean
energy sector.
Analysts remain bullish on Plug
Power stock and expect it to gain 150% in the next 12
months.
Plug Power (NASDAQ:PLUG)
Historical Stock Chart
From Aug 2024 to Sep 2024
Plug Power (NASDAQ:PLUG)
Historical Stock Chart
From Sep 2023 to Sep 2024