Plug Power Inc Turns More Bullish on New 5-Year Plan
Plug Power Inc (NASDAQ:PLUG) has been having a great year. The renewable energy stock is up 120% this year, and thanks to a new five-year plan, the company’s long-term outlook has also improved.
Plug Power Inc is a renewable energy company based in Lathan, New York that designs and manufactures hydrogen fuel cells that replace vehicles powered by electricity and conventional lead-acid batteries.
The company’s “GenKey” product line has helped revolutionize the material handling industry—increasing productivity, lowering operating costs, and reducing carbon footprints.
Its larger fuel cells are used in everything from small transit buses to full-size buses and semi-trucks. Plug Power is the only company that can service hydrogen cell engines and fueling stations for the entire logistics and transportation market as a single-source vendor.
Plug Power stock might only be trading at $2.70, but the company is a giant when it comes to liquid hydrogen use. In fact, Plug Power Inc is the world’s largest buyer of liquid hydrogen. Last year, it surpassed NASA to claim that title.
Some of the company’s customers are Amazon.com Inc. (NASDAQ:AMZN), FedEx Corporation (NYSE:FDX), General Motors Company (NYSE:GM), Toyota Motor Corp (NYSE:TM), and Walmart Inc (NYSE:WMT).
PLUG Stock Information
|Market Cap||$680.5 Million|
|Shares Outstanding||236.9 Million|
|50-Day Moving Average||$2.30|
|200-Day Moving Average||$2.38|
(Source: “Plug Power Inc. (PLUG),” Yahoo! Finance, last accessed September 24, 2019.)
Plug Power stock hasn’t been on a textbook trajectory, but it has climbed steadily higher throughout the year, nonetheless. The stock is up approximately 120% year-to-date, fueled by strong earnings results, strategic acquisitions, new agreements, and—most recently—a strong long-term outlook.
For technical traders, September has been a good month for PLUG stock, breaking through a tested resistance level of $2.86.
Plug Power’s share price will probably retrace on short-term profit-taking, but the ongoing momentum should continue into 2020.
Chart courtesy of StockCharts.com
Strong Second-Quarter Results
On August 6, Plug Power announced that revenue for its second quarter ended June 30 increased 62% year-over-year to $57.0 million. (Source: “Second Quarter 2019 Recap: Record Second Quarter Deployments for the Company,” Plug Power Inc, August 6, 2019.)
During the quarter, the company deployed a record 2,000+ “GenDrive” units, a 70% increase from the same period last year. The units went to new and recurring customers including Amazon, Bridgestone Corp (OTCMKTS:BRDCY, TYO:5108), Walmart, and Lipari Foods, LLC.
Second-quarter gross billings were up 50% year-over-year, at $58.6 million.
Plug Power reported a second-quarter net loss of $18.6 million, or $0.08 per share. During the same period last year, the company reported a net loss of $25.9 million, or $0.12 per share.
Plug Power ended the second quarter with cash and cash equivalents of $19.8 million.
During the quarter, Plug Power extended its on-road vehicle use, secured its first commercial-scale deployment of “ProGen” fuel cells with StreetScooter GmbH, a subsidiary of DHL International GmbH.
The company reiterated its full-year 2019 guidance for gross billings of between $235.0 and $245.0 million. At the midpoint, this represents a 30% increase from the $184.8 million in gross billings announced in 2018.
The company also expects to significantly improve its operating income and report positive adjusted earnings before interest, tax, depreciation, and amortization (EBITDA).
Five-Year Plan Targets $1 Billion in Revenue
Plug Power’s positive outlook for the year got a big boost in September when it unveiled its five-year business plan, which includes targeting $1.0 billion in revenue by 2024. (Source: “Plug Power Unveils Five-Year Plan Targeting $1 Billion Of Revenue By 2024,” Plug Power Inc, September 18, 2019.)
If the company hits that target, that would represent an 832% increase from the $107.2 million recorded in fiscal 2018, and a six-year compound annual growth rate of 45.1%.
It’s also targeting operating income of $170.0 million and $200.0 million of adjusted EBITDA.
Most of that growth is projected to come from the material handling industry with growing contributions from stationary and on-road markets.
Through its core material handling business, Plug Power expects to post annual revenue of roughly $750.0 million by 2024, up from the $235.0 to $245.0 million expected in 2019.
By 2024, Plug Power Inc expects its annual revenue from on-road electric vehicles to hit $200.0 million and its revenue from stationary applications to hit $50.0 million.
With more than 80 hydrogen stations, Plug Power uses 22 tons of liquid hydrogen per day; by 2024, that’s expected to increase to 85 tons per day.
Plug Power is the largest membrane electrode assembly (MEA) manufacturer in the U.S., and it expects to be the largest one in the world by 2024. MEA is the main component of a fuel cell that helps generate an electrochemical reaction.
Plug Power Inc is a great energy tech stock that has been reporting strong quarterly results. The company continues to attract larger customers, reduce costs, make strategic acquisitions, and sign new agreements.
Plug Power expects to be EBITDA-positive starting in the third quarter of 2019 and profitable in 2021.
All of which should help juice the price of Plug Power stock over the near term. Meanwhile, the company’s five-year plan should help fuel PLUG stock over the long haul.