Hold Plug Power as Technology Expansion Delivers Key Advantages

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Fuel cell system and clean hydrogen solutions provider Plug Power (NASDAQ:PLUG) is what I call a “picks and shovels” type of company. They don’t build parts needed for electric cars, not the cars themselves. It’s a savvy business model and PLUG stock holders count on Plug Power to innovate and stay one step ahead of its competitors.3d render image of hydrogen energy fuel cell from Plug Power

PLUG stock popped a couple of times recently in response to a pair of noteworthy catalysts. One of them involved a data release while the other event concerned the development of an innovative fuel cell system.

Either one of these catalysts would, in and of itself, be a compelling reason to own PLUG stock. But when you combine these two events, what you get is a powerful rationale to hold the shares if you already own them, or to add to your position for even more gains in 2020.

A Closer Look at PLUG Stock

The correction in PLUG stock that resulted from the onset of the novel coronavirus ended in mid-March. At that time, PLUG shares were trading for less than $3 apiece.

Patient investors would held onto their shares were soon rewarded with higher prices in PLUG stock. By early June, the share price had reclaimed the $5 level already and most of the coronavirus-induced losses had been recovered.

However, the bulls weren’t content to just achieve the break-even point. Over the next month, the PLUG stock price rocketed up to the $10 area. A moderate correction followed, but then the bulls ran PLUG all the way up to $13.

Does PLUG stock deserve to be trading at this level? Recent developments might convince you that the higher PLUG price is not only justified, but that the shares could continue to move upwards in the near future.

An Outstanding Q2

As I alluded to earlier, PLUG stock jumped on two occasions and one of them was an important data release. More specifically, Plug Power disclosed its fiscal data for the second quarter on Aug. 6.

Here’s a rundown of some of the second quarter’s highlights for Plug Power:

  • Deployed 2,800 GenDrive fuel cell systems, which is a record for the company
  • Closed the acquisitions of United Hydrogen and Giner ELX, thereby helping Plug Power to achieve its stated objective of “more than 50% of the hydrogen used to be green by 2024”
  • $72.4 million in gross billings, another record for the company
  • Optimistic third-quarter 2020 guidance of $110 million to $115 million in gross billings
  • Ambitious financial targets for 2024, including $1.2 billion in revenues, $200 million in operating income and $250 million in adjusted EBITDA

And, all of this transpired during a global pandemic. It’s proof positive that not only Plug Power, but the green-energy movement as a whole is running full steam ahead and preparing for challenges in the coming years.

Fueling Innovation

Plug Power is a market leader because, among other factors, the company isn’t content to rest on its past achievements. Staying competitive means continually pushing the envelope and delivering new technologies.

Thus, Plug Power’s new 1kW ProGen fuel cell system isn’t just a gimmick. It’s a potential game changer because of the technology’s broad flexibility.

Plug Power CEO Andy Marsh provides more details on the 1kW ProGen fuel cell system’s multiple applications:

“ProGen hydrogen fuel cells allow devices with electric motors to run cleanly and efficiently. The 1kW ProGen lets Plug Power power everything from electric vehicles to small robotics and UAVs, and everything in between. Yet another solution to support the global supply chain.”

Amazingly, this new fuel cell model is large and powerful, yet lightweight. And just as importantly, Plug Power’s 1kW ProGen fuel cell system is protected by five U.S. patents, meaning that the company’s competitors can’t just steal the technology.

The Bottom Line

All in all, PLUG stock has priced in the company’s recent good news but still has room to run higher. As for the company itself, Plug Power represents powerful innovation and, more broadly, the impressive progress of the clean-energy movement.

As of this writing, David Moadel did not hold a position in any of the aforementioned securities.

The post Hold Plug Power as Technology Expansion Delivers Key Advantages appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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