PLUG stock. I sort of hate PLUG stock. I sort of love PLUG stock. It was the best of times. It was the worst of times. We’ve made money on the stock. We’ve lost money on the stock.
I’ve seen “Eat, Sleep, and Trade” guys who run stock trading services totally get destroyed trading PLUG stock.
Plug stock destroyed thousands of traders and was the ‘marriage killer’ stock of the year in 2012-2013.
Today, PLUG stock may be a different company and it could finally be ready to go into a sustained multi-year uptrend, MAYBE.
On its November 7, 2019, quarterly report, Plug Power reported Q3 EPS (8c), consensus (8c). The company reported Q3 revenue of $56.38M, versus the consensus of $59.17M. Reports Q3 gross billings $61M.
Plug Power stated in its quarterly letter: “During the third quarter of 2019, the company deployed over 1,700 GenDrive fuel cell systems to new and recurring customers, including Walmart, Kroger and Sysco. Additionally, Plug Power secured Fiat Chrysler Automobiles as a new GenKey customer. During Q3 2019, 68% of our total gross billings was associated with Plug Power’s subscription program. This program entails our end customer paying us a fee on a monthly basis to access Plug Power’s fuel system solutions… We remain focused on finding optimal solutions to finance subscription business with key objective of continuously reducing our cost of capital and enhancing cash generation.”
The company said: “Given the megatrends in our multiple target markets, the foundation we have built, and the clear strategies we have developed, we believe our financial goals for 2024 of $1B in annual gross billings, over $170M in operating income, and over $200M in Adjusted EBITDA are very attainable.”
On November 11, 2019, Roth Capital analyst Craig Irwin upgraded Plug Power to Buy from Neutral with a price target of $6, up from $3, citing visibility for the company continuing on impressive growth trajectory, outlook for record revenue and EBITDA in Q4, and material EBITDA profitability in 2020. In a research note to investors, Irwin says he believes the company is passing an inflection point and the upgrade acknowledges the longer-term potential serving the opportunity in lift trucks and adjacent markets.
On November 25, 2019, B. Riley FBR analyst Christopher Van Horn raised his price target for Plug Power to $6 from $3.50 and reiterated a Buy rating on the shares. The stock closed Friday at $3.38. The company’s long-term revenue target of $1B over the next five years, with $200M in adjusted EBITDA, “seems highly probable,” given recent industry- and company-specific fundamentals, Van Horn tells investors in a research note. Based on recent award activity and market commentary, the analyst believes the stock and the fuel cell technology seem to be at an inflection point. He sees “strengthening demand” for its technology in core material handling markets, as well as lateral opportunities in on-road applications. Plug Power is better positioned in its core material handling business than ever before, contends Van Horn.
The narrative among analysts marketing PLUG stock is that the stock is “at an inflection point.”
On November 25, 2019, the company announced a new agreement with Spanish hydrogen production and distributor Compania Logistica de Hidrocarburos, or CLH. Through the agreement, CLH will develop hydrogen production assets and downstream markets in Spain, in the industrial, mobility and power production/storage sectors for distribution to Plug Power customers throughout Europe.
The CLH Group is a company engaged in the transport and storage of oil products in the Spanish market and the second largest logistics operator in Europe in terms of the extension of its pipeline network and storage capacity. In Spain, it has a pipeline network over 4,000 kilometers in length and 39 storage facilities with capacity for 8 million cubic meters, as well as being present at the main Spanish airports. At the international level, the company is developing an ambitious expansion plan and conducts its business in the UK, Oman, Ireland, Panama and Ecuador.
CLH has an international presence in logistics, fuel storage and delivery in markets including motor, aviation and marine. Together, Plug Power and CLH intended to explore other potential areas of collaboration related to the development of hydrogen solutions for airports, goods transportation and delivery networks – markets where high-asset utilization is important, and the value proposition of fuel cells makes tremendous sense.
PLUG stock trades at an expensive P/S metric of 5.62. The stock is valued at $1.08 billion, but it only did $191.9 million in sales last year. The company still has no positive earnings after 15 years but let’s not let fundamental reality get in the way of a good “inflection point” story-line.
PLUG stock does not meet the minimum requirements for inclusion in the GST portfolio at this time but for the new-generation of green-energy traders that were still in elementary and high school from 2005 – 2012, may you have better luck than we did in PLUG stock.