Plug Power Inc. experienced explosive gains in Tuesday’s morning trading, closing the session at $3.72— and commenced trading Wednesday morning with a notable rise at $3.75. The catalyst behind this surge was the announcement by Plug Power that it has commenced the production of green liquid hydrogen at its Georgia plant. The stock, however is currently experiencing a dip in its value, trading as the same as yesterday’s closing value.
At the time of this publication, Plug Power Inc stock (PLUG) has witnessed a decline.
Plug Power Inc
Current Price: $3.72
Change : 0.00
Change (%): (-0.01%)
Volume: 36.9M
Source: Tomorrow Events Market Data
The press release highlighted the plant’s status as the largest U.S. manufacturing facility in its category, capable of churning out an impressive 15 tons of liquid electrolytic hydrogen daily. Plug Power envisions this production scale to be sufficient for powering the daily operations of 15,000 forklifts. The move aligns with the company’s strategic goal of establishing a comprehensive green hydrogen ecosystem covering production, liquefaction, storage, and transportation.
Management’s optimistic comments suggest a favorable outlook, anticipating improved margins from liquid-hydrogen production compared to the gaseous hydrogen currently in its repertoire.
Despite the recent bounce, Plug Power stock remains down by approximately 96% from its five-year high, reflecting weak growth momentum and escalating losses. The company reported a modest 5% year-over-year revenue growth in the third quarter of 2023, reaching $199 million. However, the gross margin took a hit, plunging to a negative 69%, a significant deterioration from the negative 24% in the prior-year period. Over the first three quarters of 2023, Plug Power recorded a staggering net loss of $726.4 million.
The initiation of liquid hydrogen production signals promising demand on the horizon. If this category gains traction and becomes a substantial part of Plug Power’s sales mix, it could potentially drive the company closer to profitability.
While Plug Power’s technologies hold revolutionary potential, the business outlook remains uncertain. Investors are urged to approach the stock with caution, acknowledging that significant upside potential is counterbalanced by a high level of risk.
Investment Considerations: Should You Invest $1,000 in Plug Power?
Before diving into Plug Power, investors are advised to weigh the risks carefully. The Motley Fool Stock Advisor analyst team, renowned for their stock picks, did not include Plug Power among their top 10 recommendations. The Stock Advisor service offers a blueprint for success, providing guidance on portfolio building, regular analyst updates, and two new stock picks each month. It boasts a track record that has outperformed the S&P 500 by more than threefold since 2002.
In conclusion, the surge in the stock of Plug Power amid green hydrogen production has piqued interest, but investors should tread cautiously given the company’s recent financial performance and the inherent uncertainties in its path to profitability.
