Wall Street has been looking at Plug Power (PLUG) of late, and investors seem to like what they see. Shares of the fuel cell pioneer have risen on wild momentum and tremendous second-quarter results, soaring over 300% year-to-date.
It also doesn’t hurt that Plug’s modus operandi is based in a very “now” trend. Expectations are high that hydrogen fuel-cell makers will be able to provide green energy to all sorts of places wind and solar power can’t access. Furthermore, it is anticipated the ESG (Environmental, Social and Governance) investing trend will only gather pace as the decade progresses.
PLUG’s business is progressing, too. On Wednesday, the company announced it is launching a 1kW ProGen fuel cell system to operate in small scale robotics, unmanned aerial vehicles (UAVs), automatic guided vehicles (AGVs), and various aerospace applications.
The new light-weight fuel cell system uses compressed hydrogen for its fuel and is based on tech developed by EnergyOr, a Montreal-based fuel cell systems company that Plug acquired in June 2019.
H.C. Wainwright analyst Amit Dayal expects Plug’s net revenues to climb to $1.1 billion in 2024, slightly beneath Plug’s guidance of $1.2 billion.
Looking further ahead, the 5-star analyst forecasts revenue to jump from $287.7 million in 2020 to $2.6 billion in 2028, “at an eight-year CAGR of 31.8%,” and expects Plug to “remain aggressive with expanding its portfolio of offerings to include new end markets.”
“We believe, relative to prior years, the company's recent financings have positioned it to allocate resources to these efforts. We believe development efforts around fuel cell design for drones and robotics could also translate into design and efficiency improvements for the company's core transportation offerings. We also believe the company's existing customers such as Amazon could potentially be early adopters for such offerings as those players continue to prioritize efficiency and enhanced system uptimes,” Dayal concluded.
To this end, Dayal rates PLUG a Buy along with a $14 price target. This figure implies a modest upside of 8%. (To watch Dayal’s track record, click here)
There’s plenty of support for the fuel cell maker on Wall Street. PLUG's Strong Buy consensus rating is based on 9 Buys and 2 Holds. However, the analysts are likely to revise their models shortly, following the shares’ constant upward trajectory. As for now, going by the $12.12 average price target, shares are expected to drop by 6%. (See Plug Power stock analysis on TipRanks)
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