Green Energy Stocks: Plug Power (PLUG)
Any time a small publicly traded company gets an order from the world’s biggest retailer, investors tend to take notice. Plug Power (PLUG) announced Feb. 26 that it has received an order from Walmart (WMT) to deploy a total of 1,738 of its GenDrive fuel cell units over the next two years. PLUG stock is up nearly 50% in three days of trading through Feb. 28 on the news and subsequent analyst upgrades.
CEO Andy Marsh said this about Walmart’s order:
“This agreement is a tripling of Walmart’s commitment to Plug Power’s feel cells, and is encouraging because it comes from a company with so much experience using our product.”
Currently, Walmart has 535 fuel cells in operation at two Canadian distribution facilities, as well as one in the U.S. In addition to providing the fuel cells for Walmart’s fork lifts, Plug Power has a six-year service contract to maintain the machines used to recharge the forklifts. This is a key benefit because it provides recurring revenue — something the green energy stock lacked in the past.
In its Q3 earnings announcement, Plug Power’s CEO indicated that orders from companies like Walmart should help it reach breakeven for EBITDAS (the S stands for stock compensation) in fiscal 2014. That’s not bad for a company whose EBITDAS in the first nine months of the year was $16 million in the red.
Plug Power reports Q4 results on March 13 before the opening bell. I’d be shocked if it delivered anything but good news. Despite PLUG’s impressive run-up, I’d say that if you’re interested in PLUG stock, I’d be buying before earnings are released.