While the poster boy for green-energy stocks that have supposedly gone up too far, too fast would probably be Tesla (NASDAQ:TSLA), there’s another up-and-comer vying for that title: Plug Power (NASDAQ:PLUG). And lately, PLUG stock has turned heads with its sharp price move to the upside.
Plug Power stock recently attained its highest price in more than five years. Which, seems to be proof that hydrogen-fuel cell engines are a hot industry. However, value-focused investors might claim that the shares aren’t just hot, but overheated.
So, are their concerns justified, or misplaced? Let’s look closer.
Why the Lightning-Fast Price Move Happened
The PLUG stock price reached its highest level since August of 2014 for one simple reason: Plug Power announced an agreement to partner with Lightning Systems to build commercial trucks that produce zero emissions. Specifically, Plug Power’s hydrogen fuel-cell engines will connect with Lightning Systems’ electric drivetrains and batteries, which will power the world’s first fuel cell-powered, electric Class 6 commercial trucks of up to 12.5 tons.
The standard delivery range of these trucks will be more than 200 miles. So this partnership marks a transition as Plug Power can now focus not only on “last-mile” commercial delivery, but “middle-mile” delivery as well. In other words, Plug Power’s products can now target companies that ship products from warehouses to distribution centers, and/or from those centers to retail stores.
Plug Power President and CEO Andy Marsh summed up the significance of the Lightning Systems agreement, saying:
“This partnership allows us to meet our customers’ needs at every stage of their journey from fuel cell-powered forklifts on the warehouse floor to last-mile delivery and now middle-mile delivery. We now offer sustainable solutions for every link in the global supply chain.”
Lightning Systems, which bills itself as “a global developer of zero-emission drivetrains,” touted the agreement as a synergistic partnership wherein the two companies “bring a wealth of experience in the material handling, logistics and trucking industries” and “have spent a combined three decades servicing leading companies around the globe.”
Lightning Systems CEO Tim Reeser further added:
“Lightning’s modular powertrains were designed to support both battery-electric and fuel cell-electric vehicle configurations, so this is a natural next product for us. Plug Power’s hydrogen fuel cell system dovetails elegantly with our existing technology.”
Adding Fuel to the Movement – And the Share Price
It’s not every day that we hear of automotive-part combinations as being elegant. However, I do see the beauty in meshing the two companies’ technologies in pursuit of a next-generation, zero-emissions commercial vehicle. With the trucks projected to be available to the buying public in the third quarter of this year, the Plug Power-Lightning Systems partnership will mark a major milestone not only in fuel-cell usage, but also in the development of the green-energy movement.
Of course, the self-proclaimed short sellers are out in full force on social media and message boards; But they sustained losses in 2014 when PLUG’s stock price spiked above $8. And now, they’re setting themselves up for another round of pain.
There’s no point in battling against a company with so much momentum. Plug Power’s hydrogen fuel-cell shipments have literally tripled from 10,600 units back in 2015 to over 32,000 units as of January 2020.
So, the partnership with Lightning Systems is the perfectly timed catalyst that could propel PLUG stock to the next level. If the shares do reclaim the $8 level, any remaining short sellers will likely be squeezed out of their positions. Which, could potentially open the door to $10 and beyond for Plug Power stock.
The Final Word on PLUG Stock
I’ve assigned PLUG stock an “A” rating in light of a potent partnership that could prove to be historically significant for the green-energy movement.
Shorting this stock is a dangerous proposition now, as Plug Power has momentum on its side; Along with next-generation technology that could change the world.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system — with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.