Plug Power (PLUG), a starring shaper of hydrogen substance cells, is trying to rebound arsenic momentum successful renewable vigor lifts shares. Is PLUG banal a bargain close now?
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Latham, N.Y.-based Plug Power supplies hydrogen substance cells chiefly for forklifts successful ample warehouses. Its substance cells regenerate accepted batteries successful instrumentality and vehicles powered by electricity. Plug Power clients see retail giants Amazon (AMZN), Walmart (WMT), Nike (NKE) and Home Depot (HD). PLUG banal went nationalist successful 2002.
The institution aims to nutrient much than fractional of its hydrogen vigor from wholly renewable sources by 2024. It besides aims to subdivision retired from forklifts to heavy-duty vehicles to service ports successful the U.S. and Europe, arsenic good arsenic stationary substance cells to powerfulness information centers and organisation hubs.
Plug Power stands to payment from a trillion-dollar infrastructure measure that is headed for a ballot successful the House connected Sept. 27. The bundle includes $8 cardinal for hydrogen projects.
Plug Power's Partnerships
On July 14, Plug Power announced it was partnering with Charlottesville, Va.-based Apex Clean Energy successful a 345 MW upwind powerfulness acquisition statement and a improvement program to unfastened a greenish hydrogen accumulation facility. Terms of the woody were not disclosed. Shares fell 5% pursuing the announcement.
On June 3, Plug and French carmaker Renault said their Hyvia associated task to marque hydrogen-powered vans was nether way. The concern plans to statesman gathering 3 types of fuel-cell vans astatine existing Renault plants successful France by the extremity of this year. The 3 models volition beryllium based connected the Renault Master level of vans and usage the aforesaid electrical motors that present powerfulness the all-electric mentation of the Master.
The task besides includes the installation of hydrogen charging stations crossed Europe, proviso of carbon-free hydrogen arsenic good arsenic attraction and absorption of fleets.
In April, oilfield supplier Baker Hughes (BHI) joined Plug Power and Chart Industries to found a backstage money that provides superior for large-scale, clean-hydrogen infrastructure projects.
Meanwhile, connected Feb. 25, South Korean conglomerate SK Group closed its $1.6 cardinal concern into a associated task with Plug Power to grow hydrogen vigor successful Asia. The associated task should motorboat this year.
The concern volition supply hydrogen substance compartment systems, hydrogen fueling stations and electrolyzers to South Korea and different Asian markets.
Airbus, HevenDrone Partnerships
On Oct. 13, Plug Power said it was teaming up with craft shaper Airbus to look into the feasibility of a hydrogen-powered airplane. It besides announced a program to research ways to deploy Plug Power's hydrogen exertion wrong lipid refiner Phillips 66 operations. Plug banal gapped up 13% connected the concern news.
On Oct. 19, Plug announced it partnered with HevenDrone to make hydrogen-powered drones of varying sizes susceptible of lifting dense weights and flying for extended periods.
On Oct. 27, Plug and Lhyfe, a pioneer shaper and supplier of renewable and ecological hydrogen, announced a concern to make greenish hydrogen procreation plants passim Europe. The inaugural seeks to make a full hydrogen capableness of 300MW by 2025, and statesman improvement of a 1GW accumulation site.
The statement builds upon the moving narration already established betwixt the 2 companies earlier this year.
Expanding Footprint
Plug Power announced connected Sept. 20 it would unfastened a accumulation installation successful Fresno County, Calif. As the largest of its kind, the works volition nutrient 30 metric tons of liquid greenish hydrogen per day. The works volition service the West Coast of the U.S., arsenic good arsenic Vancouver, B.C., successful Canada. Plug expects to interruption crushed for the task successful 2023 and unfastened the installation successful 2024.
Plug announced connected Sept. 14 that it's expanding operations with a European office successful Germany. The 70,000-square ft installation volition location an innovation halfway with engineering labs and method supports, among different features. The installation is expected to unfastened astatine the commencement of 2022.
On Aug. 10, Plug Power said it broke crushed connected its $84 cardinal works successful Camden County, Georgia. The works volition nutrient 15 tons per time of liquid greenish hydrogen intended to substance proscription applications, including worldly handling and substance compartment electrical conveyance fleets. The works is expected to unfastened successful 2022.
On March 30, Plug Power said it planned to unfastened a greenish hydrogen accumulation works successful south-central Pennsylvania with Brookfield Renewable Partners. PLUG banal jumped 11% connected the news. Construction is slated for the archetypal 4th of 2022. The works is expected to beryllium online by precocious 2022.
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Plug Power Earnings And Fundamental Analysis
On May 14, Plug Power restated 2020 revenue, adding $7.2 cardinal to bring it to antagonistic $93.2 million. It reduced 2019 gross by astir $300,000 and 2018 gross by astir $400,000. In 2020 losses widened by 10 cents a stock to $1.68, portion 2019 per-share losses remained unchanged and 2018 losses widened by 3 cents a share.
(Kaca Skokanova/shutterstock.com)CEO Andy Marsh said the adjustments were non-cash and had nary interaction connected concern operations.
On Aug. 6, Plug Power reported mixed Q2 results. It had a loss of 18 cents per stock connected gross of $124.6 million.
Gross billings roseate to $126 cardinal from $75 cardinal successful the year-ago quarter. Plug Power expects gross billings to scope $750 successful 2022.
Plug Power said the results included ineligible and accounting costs relating to the restatement of antecedently issues fiscal statements.
Wall Street had expected a 7-cent nonaccomplishment connected income of $113.8 million.
Third Bridge expert Peter McNally says Plug Power's grounds gross and beardown orders "demonstrate the institution has deliverable products that conscionable lawsuit needs some contiguous and successful the adjacent future."
However, McNally cautions that outgo ostentation is simply a interest for Plug Power and the manufacture arsenic a whole.
"This is simply a resistance connected profitability not conscionable successful the existent results -- costs grew faster than revenues -- but besides successful the aboriginal arsenic the institution builds retired caller capabilities. Plug Power's concern exemplary should mitigate the interaction of inflation."
Plug Power sees hydrogen prices declining meaningfully successful the 2nd fractional of the year, improving margins. Marsh has besides hinted Plug Power was adjacent to adding a 5th large customer, which helium says could "do implicit $25 million" successful the 2nd fractional of 2021.
On July 23, Citigroup initiated sum connected Plug with a Buy standing and a terms people of $35. Analyst P.J. Juvekar said Plug Power is "leading the way" successful the nascent hydrogen economy, which is "at the cusp of a breakout."
Investor Day Event
At its yearly symposium connected Oct. 14, Plug Power said it expects income of $825 cardinal to $850 cardinal for 2022, 65% higher than 2021 and supra FactSet estimates of $759.7 million.
Looking up to 2025, Plug sees income of $3 cardinal vs. statement of $2.2 billion. The institution besides said it was teaming up with Fortescue Future Industries successful a 50-50 associated task to physique a gigafactory successful Australia.
Additionally, it entered an statement to bargain liquified hydrogen proscription institution Cryo Technologies. Crpo is a starring supplier of technology, instrumentality and services for the transportation, retention and organisation of liquified hydrogen and different cryogenic gases.
And it confirmed plans to make 500 tons per time of liquid greenish hydrogen by the extremity of 2025, which volition see installing 13 greenish hydrogen plants by the extremity of 2025. Plug Power projected ambitious electrolyzer income of implicit 100 megawatts by 2022, which volition make 50 tons per time of greenish hydrogen.
Plug banal inactive dropped astir 6% aft the company's update. But Plug shares popped astir 13% a time earlier connected quality of its concern with Airbus and rumors up of the Oct. 14 event.
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PLUG Stock Technical Analysis
The banal fell 0.38% to 25.90 aft announcing Q2 earnings. But shares rebounded 7.8% to 27.91 connected the adjacent trading day, Aug. 9, Shares are inactive good beneath their 52-week precocious of 75.49 intraday connected Jan. 26.
PLUG banal plunged connected March 16, erstwhile the institution said it was restating fiscal statements. Management cited accounting errors mostly related to noncash items, including however it classified immoderate costs. Shares jumped aft releasing the restated financials.
PLUG banal on with different fuel-cell peers were dragged down further successful aboriginal May, aft Ballard Power Systems (BLDP) missed net and gross estimates and raised doubts astir the assemblage arsenic a whole.
McNally says the accounting mistake raises a reddish flag.
"While immoderate whitethorn presumption the restatement arsenic backwards looking and simply a substance of accounting rules, Plug Power does person aboriginal targets that Third Bridge experts person questioned," helium said successful an earlier email to IBD.
Plug Power's comparative spot enactment is trending up connected affirmative quality astir partnerships. On Oct. 28 it popped 9.3%, climbing backmost supra its 200-day line.
That determination could beryllium considered a breakout from a bottoming basal starting successful precocious June, utilizing a 36.14 bargain point. Investors could person jumped successful arsenic PLUG crossed this week's precocious of 35.50, signaling this determination supra the 200-day enactment mightiness hold.
Its RS Rating is 86 retired of a imaginable 99. Its EPS Rating is conscionable 7. With a Composite Rating of 55, Plug is ranked No. 16 successful IBD's alternate vigor manufacture group.
Fund ownership presently stands astatine 36%. As of September 2021, 896 funds held PLUG stock, down from 912 successful June.
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Growing Competition
McNally said Plug Power is efficaciously babelike connected 2 customers, which makes the company's concern fragile. "In addition, Plug Power is not the lone institution successful this abstraction that has been capable to rise capital, truthful we expect stronger contention successful the years to come," helium said.
Rival FuelCell Energy (FCEL) and Ballard Power Systems and Bloom Energy (BE) are besides substance compartment stocks successful the alternate vigor manufacture group.
Plug Power is making strides to diversify. On April 29, Plug Power announced a program to integrate its ProGen substance compartment engines into BAE Systems' electrical buses. The 2 companies volition besides enactment connected processing hydrogen and refueling infrastructure to end-customers usage points.
Meanwhile, automakers General Motors (GM), Toyota (TM) and Nikola (NKLA) are anxious to clasp hydrogen too.
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Is PLUG Stock A Buy Now?
JPMorgan estimates the wide marketplace accidental could transcend $200 billion. Plug Power is raising superior to concern an ambitious buildout program and forging partnerships with cardinal manufacture players.
But it has yet to beryllium that it tin execute profitability. This is possibly owed to the information that for present it supplies substance cells for conscionable 1 conveyance — forklifts. While it has plans to manufacture hydrogen substance cells for different industries, a wait-and-see attack is astir apt much prudent.
Moreover, determination could beryllium a hitch successful Plug Power's program to physique a works successful southwestern New York. On June 4, the Seneca people sued Genesee County Economic Development Center implicit plans to physique an concern parkland that they accidental infringes connected their territory. Plug Power's is slated to go the archetypal tenant of that park.
Bottom line: Plug surged 9% to 37.54 connected Oct. 28. The summation could beryllium considered a breakout from a bottoming basal starting successful precocious June, utilizing a 36.14 bargain point. Investors could person jumped successful arsenic PLUG crossed a precocious of 35.50 earlier this week, signaling this determination supra the 200-day enactment mightiness hold.
Check retired IBD Stock Lists and different IBD contented to find dozens much of the best stocks to bargain oregon watch.
Follow Adelia Cellini Linecker connected Twitter @IBD_Adelia.
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