Why Plug Power Is Up 45% In One Month

In December it announced the expansion of deployed GenDrive fleet at the Daimler manufacturing facility in Alabama. Daimler had deployed more than 400 Plug Power GenDrive systems in the material handling vehicles prior to this expansion.

Riley FBR has resumed the coverage on the stock with a $3.50 price target which suggests an upside of 40% to the current price. Riley likes PLUG’s opportunities to secure a global distribution agreement with a well-capitalized, integrated solutions provider to expand customer reach in Europe, Asia-Pacific and certain Latin American countries, and establish a joint venture or partnership with one of the major industrial gas companies to secure a stable supply of hydrogen and drive down cost per kilogram.

Risks: The market cap is only $620 million. So there will be a lot of volatility. The company is yet to make profits. If there is an alternative to fuel cells then the revenue could drop significantly.

Conclusion: This is a high risk and high return stock. With the stock already up 93% year-to-date, there could be some profit booking. Revenue growth is very strong. However, the company should be able to make profits and then it would attract a lot of long-term investors.

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