Last week, hydrogen fuel cell technology company Plug Power (NASDAQ:PLUG) reported dismal third-quarter results, inviting a slew of price target cuts by Wall Street analysts. That said, over 70% of analysts covering PLUG stock remain bullish as the company reaffirmed its long-term targets, while others see the possibility of the company over-promising and under-delivering.
PLUG's Q3 Results Reflect Near-Term Concerns
Plug Power’s Q3 revenue increased 31% year-over-year to $188.6 million, but loss per share widened to $0.30 from $0.19 in the prior-year quarter. Analysts were expecting a loss of $0.24 on revenue of $240.6 million. Higher costs and growth investments weighed on the bottom line.
The company continues to expect its 2022 revenue to be 5% to 10% below its previously issued outlook range of $900 million to $925 million, as some larger projects are anticipated to be completed in 2023 and not this year due to the timing of the projects and supply chain bottlenecks.
Meanwhile, Plug Power is confident about delivering revenue of $1.4 billion in 2023, driven by solid growth in its applications and energy/electrolyzer business.
Is Plug Power a Buy, Sell, or Hold?
Following the print, Truist Financial analyst Bronson Fleig slashed his price target for PLUG stock to $18 from $32 and reiterated a Hold rating. The analyst feels that while demand "appears constructive," PLUG shares might remain range-bound in the near term.
BTIG analyst Gregory Lewis lowered his price target to $25 from $35 but reiterated a Buy rating. Lewis believes that higher equipment sales, increased hydrogen production, and waning supply chain issues should drive positive gross margins in 2023.
Overall, Wall Street is cautiously optimistic about Plug Power stock, with a Moderate Buy consensus rating based on 13 Buys and five Holds. The average PLUG stock price target of $29.56 suggests 65.2% upside potential. Shares have plunged nearly 37% year-to-date.
Plug Power is positive about delivering annual revenue growth of 50% through 2030. However, the company’s recent performance has raised some concerns about its ability to meet lofty projections.
Most Wall Street analysts are cautious about the near-term prospects. Nonetheless, they believe in Plug Power’s long-term potential due to the growing demand for hydrogen fuel cell technology and the benefits for clean energy companies under the Inflation Reduction Act.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.