Plug Power Inc (PLUG) Recent Surge Makes Analyst Go Bullish on PLUG

Wall Street wasted no time in upgrading its price target after PLUG reported better-than-expected Q3 adjusted results.


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Shares of Plug Power, Inc. (PLUG) flied to 15% by the end of trading on Wednesday, closing at $23. The stock is shaping up for a bullish run with analyst raising their price targets for PLUG.

The Latham-based firm engaged in the development of hydrogen fuel cell systems surpassed the consensus estimate for revenue of $106.5 million to a total of $107 million in Q3 2020. This shows an 80% incline from $59.5 million in the same period last year.

The company reported a net loss of $39.4 million during the third quarter, however, PLUG posted a beat on the bottom line, too, with Non-GAAP earnings per share of $0.03 compared to the estimated $(0.04)per share.

The share outstanding increased by 57% to 371 million. The gross billings for Q3 were recorded at $125.6 million, up by 106% year over year which was the highest in Plug Power’s 22-year history.

The overall outlook remains positive as the company has raised its gross billing estimate for 2020 between $325 million to $330 million from prior announced $31 million.

PLUG expects over $725 million in cash to execute on its growth initiatives based on its recent capital raise position.

In addition, the company has signed an MOU with Linde to deploy pilot class-6 and class-8 vehicles on road in the next year.Also, PLUG announced strategic partnerships with Apex Clean Energy and Brookfield Energy to build liquid green hydrogen plants and source renewable electricity.

Wall Street analysts were the first to raise the price target of PLUG after the company reported better-than-expected Q3 results and updated its future guidance.

According to TheFly.com, Roth Capital expects PLUG to increase to $22 within a year. Whereas Oppenheimer projects $23, B. Riley says $24, and Craig-Hallum estimates $26.

The increasing adoption of Plug Power’s forklift business is ‘encouraging’ says Oppenheimer analyst Colin Rusch. The firm’s stance on its solutions’ potential to provide back-up power for data center applications and substitute diesel gensetsis attracting more demand in the market.

The analyst’s bullish stance on PLUG and investors being elevated by such promising future growth seems justified by the Q3 results and future outlook. However, there is one key point to note for the investors, take it as a caution: The sales of Plug Power, Inc. (PLUG) inclined by 80% in the last quarter, but at the same time, its losses increased even at a faster rate by 117%. Also, the free cash flow is negative at $168.2 million and the cash burn rate is faster.

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