When Plug Power (NASDAQ:PLUG) reported its third-quarter results last year, they were somewhat mixed. There was a adjusted loss per share of 8 cents, which was slightly below Wall Street expectations. Furthermore, revenues of $56.4 million were also below analysts forecasts of $59.2 million. However, Wall Street shrugged this off — and PLUG stock has since gone from under $3 to now around $4.70.
But of course, in the past few weeks, there has been many investors selling. Keep in mind that not long ago, PLUG stock hit a high of $5.72. And now nearly 19% lower than those levels, this is a big week for the company.
Plug Power Earnings
On Thursday, Plug Power will announce its fourth-quarter results for fiscal 2019. And it seems like a good bet that the company will hit its forecast. After all, a few weeks ago, Plug Power released its preliminary results.
First of all, the company confirmed its goal to hit $1 billion in revenue by 2024. It also noted that next year’s revenues will be about $300 million. And as for the current quarter, the company is projecting gross billings of $93 million to $95 million — which would be a record.
A key driver for the growth — at least in the short-run — is a variety of large deals, such as with Walmart (NYSE:WMT), DHL, ENGIE and Amazon (NASDAQ:AMZN). And overall, it really does look like PLUG stock is reaching an important inflection point in terms of adoption of its fuel cell technology.
The quarter also saw some other developments, including:
- PLUG entered an alliance with Colorado-based Lightning Systems, which is a developer of zero-emission drivetrains. This will allow for middle-mile delivery logistics between warehouses and distribution centers.
- PLUG launched its heavy-duty 125 kW ProGen zero emission hydrogen engine. This will increase the company’s market opportunity into on- and off-road applications, such as Class 6, 7 and 8 trucks as well as transit buses and numerous port applications.
- The company priced a secondary offering for 40 million shares, raising $110 million.
However, the deal that got the most buzz — and helped to drive PLUG stock — was with a Fortune 100 company. The contract is valued at over $172 million for the next two years and involves GenDrive fuel cell power, GenFuel hydrogen fuel, storage and support.
Bottom Line On PLUG Stock
The roots of Plug Power go back to the late 1990s, when the company was formed as a joint venture between DTE Energy (NYSE:DTE) and Mechanical Technology Inc. Yet, it’s been mostly a tough journey. Adoption has been difficult, and the company has had to frequently raise capital to shore up the balance sheet.
But through all this, the company has been able to build a valuable end-to-end platform for hydrogen and fuel-cell systems. The result is that customers have been able to benefit from improved productivity, lower operating costs and reduced carbon footprints. Moreover, Plug Power has also been smart to focus on lucrative markets like forklifts.
However, there remain challenges. With the prices for traditional energy sources plunging — like for crude oil and natural gas — the renewables are looking less attractive. The global shock of the coronavirus from China could also be a headwind. After all, customers may hold off on making decisions on capital expenditures.
Thus, when it comes to PLUG stock, the upcoming earnings will be essential as we may get updated guidance. And this could cause some volatility.
So for now, it’s probably best to hold off on a purchase until after earnings.
Tom Taulli (@ttaulli) is the author of various books on investing and technology, including Artificial Intelligence Basics, High-Profit IPO Strategies and All About Short Selling. He is also the founder of WebIPO, which was one of the first platforms for public offerings during the 1990s. As of this writing, he did not hold a position in any of the aforementioned securities.