Plug Power, Inc. (PLUG) is a leading provider of hydrogen fuel cell turnkey solutions and fuel processing technologies for the electric mobility and stationary power markets in North America and Europe. The company provides its services to manufacturing businesses and through retail chains, dealers, and direct sales force.
PLUG has deployed a record 4,100 fuel cell systems and 13 hydrogen fueling stations in the last reported quarter. In fact, its green hydrogen generation plants will be one of the first green hydrogen generation networks in North America, with plans to expand globally. This key contribution towards building a green hydrogen industry amid an ongoing paradigm shift in the power, energy, and transportation industries puts PLUG in a favorable position to generate solid gains.
PLUG’s robust products and its strategic partnerships have helped the stock gain 1595.1% over the past year. This impressive performance, combined with several other factors, has helped PLUG earn a “Strong Buy” rating in our proprietary rating system.
Here is how our proprietary POWR Ratings system evaluates PLUG:
Trade Grade: A
PLUG is currently trading higher than its 50-day and 200-day moving averages of $29.78 and $14.22, respectively, indicating that the stock is in an uptrend. In fact, the stock has gained 306.4% over the past three months, reflecting solid short-term bullishness.
PLUG’s revenue has increased 79.9% year-over-year to $106.99 million in the third quarter ended September 30, 2020. Gross billings rose 73.4% sequentially to $125.60 million.
On January 12, PLUG and Groupe Renault announced an agreement t to launch a 50-50 joint-venture targeting more than a 30% share of the fuel cell-powered light commercial vehicle (LCV) market in Europe. This strategic partnership should position PLUG to become a key player in the fast-growing market for fuel cells in Europe.
Also in January, the company announced a strategic collaboration with SK Group, one of the leading South Korean business groups, to accelerate hydrogen as an alternative energy source in Asian markets. In conjunction with this partnership, SK Group has agreed to make a $1.5 billion strategic investment in PLUG. PLUG expects rapid growth and significant revenue generation from the joint venture that will be incremental to its 2024 plan.
Buy & Hold Grade: A
In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers, PLUG is well positioned. The stock is currently trading just 6% below its 52-week high of $73.90, which it hit on January 13.
The company’s net revenue has grown at a CAGR of 44.6% over the past three years, while its total assets increased at a CAGR of 75.9% over this period. This can be attributed to the company’s increasing deployment of fuel cell systems and rapid expansions.
Peer Grade: A
PLUG is currently ranked #7 of 87 stocks in the Industrial – Equipment industry. Other popular stocks in this industry are Ballard Power Systems Inc. (BLDP), Bloom Energy Corporation (BE) and FuelCell Energy, Inc. (FCEL)
BLDP, BE, and FCEL gained 272.8%, 327.3%, and 833.7%, respectively, over the past year. This compares to PLUG’s 1595.1% returns over this period.
Industry Rank: A
The Industrial – Equipment industry is ranked #20 of123 StockNews.com industries. The companies in this industry offer turnkey solutions, precision parts, products, and systems for applications serving various customers in end-markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices, and energy.
After reeling from the effects of the pandemic-driven shutdown last year, companies in this industry are restructuring themselves to enhance the resiliency of their supply chains, thereby hopefully paving the path to long-term success. An improvement in manufacturing, alongside a gradual recovery in demand and substantial business spending on equipment, should also help the industry to regain substantial momentum this year.
Overall POWR Rating: A (Strong Buy)
PLUG is rated “Strong Buy” due to its impressive financials, short- and long-term bullishness, solid price momentum, and underlying industry strength, as determined by the four components of our overall POWR Rating.
PLUG has plenty of upside despite gaining 1595.1% over the past year. A shift to broader use of hydrogen in the face of growing climate change concerns worldwide positions the company to grow and lead the green hydrogen economy.
Analyst sentiment, which provides a good sense of a stock’s future price movement, is impressive for PLUG. It has an average broker rating of 1.41, indicating favorable analyst sentiment. The consensus EPS estimate for the quarter ending March 31, 2021 represents a 41.7% improvement year-over-year. The consensus revenue estimate of $444.3 million for the current year represents a 34.9% increase from the same period last year. This outlook should allow PLUG to advance in the upcoming months.
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PLUG shares were trading at $64.91 per share on Thursday afternoon, down $4.59 (-6.60%). Year-to-date, PLUG has gained 91.42%, versus a 1.78% rise in the benchmark S&P 500 index during the same period.
About the Author: Imon Ghosh
Imon is an investment analyst and journalist with an enthusiasm for financial research and writing. She began her career at Kantar IMRB, a leading market research and consumer consulting organization. More...
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