Plug Power (NASDAQ: PLUG) – the Hydrogen Fuel Cell Manufacturer – Rises Over 12% in the Pre-Market as the Stock Maintains Its Popularity Among the Robinhood Crowd
Plug Power (NASDAQ:PLUG), the manufacturer of hydrogen fuel cells, has emerged as a favorite stock among the Robinhood traders in recent days, as evidenced by the Robintrack’s Leaderboard – a dedicated webpage that tracks trending stocks on the Robinhood brokerage platform which, incidentally, has become increasingly popular with a new wave of Generation Z traders.
Given the extraordinary interest that Plug Power has garnered on Robinhood, it is hardly surprising that the stock is experiencing an unprecedented bullish wave. After rising 15.43 percent yesterday, the stock is up another 12 percent in Wednesday’s pre-market session. Year to date, Plug Power has risen over 98 percent to $7.26 in the current pre-market session (as of 09:11 a.m. ET), constituting the highest price level since at least 2011.
There are a number of factors responsible for pushing Plug Power to fresh year-to-date highs. The company has acquired United Hydrogen Group and Giner ELX for a cumulative price of $123 million in a move that has the potential of transforming Plug Power into a major supplier of hydrogen gas – the essential ingredient required to power fuel cells.
Plug Power’s press release explained the rationale behind this acquisition binge in the following words:
“These acquisitions are in line with the Company’s vertical integration strategy in the hydrogen business laid out in September of 2019 with plans to have more than 50% of the hydrogen used to be green by 2024. These activities further enhance Plug Power’s position in the hydrogen industry with capabilities in generation, liquefaction, and distribution of hydrogen fuel complementing its industry-leading position in the design, construction, and operation of customer-facing hydrogen fueling stations.”
Moreover, these acquisitions have also enabled Plug Power to raise its 2024 financial targets, with the company now predicting $1.2 billion in annual revenue for the applicable fiscal year, constituting an increase of $200 million relative to previous estimates. The company has also increased its estimate for FY 2024 operating income by $40 million to $210 million. Finally, Plug Power now expects to earn $250 million in adjusted EBITDA during FY 2024, constituting an increase of $50 million relative to the previous guidance.
Recognizing the potential for a paradigm shift, Barclays initiated its coverage for Plug Power in early June with an ‘Overweight’ rating and a $7 price target. Continuing this trend, the investment bank H.C. Wainwright issued a new street-high price target of $14 on Wednesday, translating to a bullish potential of over 96 percent relative to the current price level.
It should be noted that many analysts believe that the hydrogen fuel cell industry is currently at the precipice of mainstream adoption, bolstered by companies such as Nikola Motors (NASDAQ:NKLA) which are attempting to incorporate this technology into their offerings. As a refresher, Nikola is planning to offer its vehicles in two power configurations: an FCEV (Fuel-Cell Electric) or BEV (Battery-Electric). Should Nikola succeed in this endeavor, it would grant Plug Power a pivotal role in the emerging industry dynamics.
Bear in mind that Plug Power is not the sole player in this sphere. Some of its competitors, such as FuelCell Energy (NASDAQ:FCEL), have been around for the better part of five decades. Moreover, readers should remember that hydrogen fuel cell technology does have its detractors. Given that this technology is currently in its nascent stage, requires a tremendous investment in refueling station infrastructure, and is generally unviable from a commercial standpoint at the present time, there is some merit in the associated cynicism.
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