Plug Power (NASDAQ:PLUG) stock rose in early November after the hydrogen fuel cell provider reported record third-quarter numbers that breezed past expectations, impressing investors.

Specifically, in the third quarter of 2020, Plug Power reported record-high revenues, record-high deliveries and record-high profit margins — the sum of which broadly underscore that the hydrogen economy is rapidly gaining traction, and that Plug Power is at the epicenter of this mega-shift in energy generation.

This hydrogen energy paradigm shift is still in its first few innings. Over the next several years, hydrogen energy will only become more and more widespread. As it does, Plug Power will sustain enormous revenue and profits. This enormous revenue and profit growth will power PLUG stock significantly higher.

It’s that simple. So buy PLUG stock, and hold PLUG stock. In this emerging hydrogen economy leader, you have a long-term winner.

Here’s a deeper look.

The Dawn of the Hydrogen Economy

Zooming out, Plug Power has enormous potential in clean energy revolution over the next decade.

Hydrogen is crucial to the clean energy revolution in the 2020s. The next generation of clean transportation depends on it. Today, we obviously depend on battery electricity for most of our clean transportation, but the future will be built on a combination of battery electricity and hydrogen.

The advantages offered by both are important to highlight. For example, battery electricity beats hydrogen when it comes to cost, efficiency, safety and public roads infrastructure. To that extent, battery electricity will likely be the dominant clean energy source for passenger cars, last-mile delivery vans and aircraft.

But, hydrogen beats battery electricity when it comes to range, recharging times and emissions. So, in heavy-usage and long-range situations, hydrogen is the better renewable energy source. To that extent, hydrogen fuel cells will likely be the dominant clean energy source for industry, cross-country haul and stationary.

Thus, while EVs are getting all the hype today because the clean energy wave has emerged in the passenger car market first (where battery electricity beats hydrogen), hydrogen fuel cells will start to receive a bunch of hype over the next decade as the clean energy waves proliferates into the industry, cross-country haul and stationary end-markets.

Strong third quarter earnings confirm that Plug Power and PLUG stock will be leading that proliferation.

The Unrivaled Vertically Integrated Leader in Hydrogen

Plug Power is — for all intents and purpose — the leader of the hydrogen economy.

This company got its start by applying its advanced hydrogen fuel cell technology into the end-market where that tech adds the most obvious value: Materials handling, or in other words, forklifts in warehouses.

Over the past several years, the materials handling industry has increasingly adopted hydrogen tech, because it is the most cost-effective and labor-efficient green energy solution. As the industry has pivoted towards hydrogen tech, many of the biggest warehouse operators — like Walmart (NYSE:WMT) and Amazon (NASDAQ:AMZN) — have partnered with Plug Power to provide the hydrogen fuel cells to power this new era of “clean” forklifts.

Over the next several years, every other warehouse operator in the world will follow in Walmart and Amazon’s footsteps, and go green with hydrogen forklifts. Many of them will choose Plug Power to help them do so.

But that’s really just the tip of the iceberg when it comes to the PLUG growth narrative.

The company has leveraged its expertise in creating HFCs for use in the materials handling industry, to launch new HFCs designed for use in other end-markets that could also benefit from hydrogen technology. This includes the 125kW ProGen and 30kW ProGen hydrogen engines. The former is designed for use in heavy-duty trucks. The latter is designed for use in delivery vans. It also includes the GenSure HP platform, which is designed to be a low-cost, clean energy alternative to power data centers.

At the same time, Plug Power has made multiple acquisitions — United Hydrogen and Giner ELX — to become a more vertically-integrated hydrogen company that controls the entire hydrogen energy life-cycle, from generation, liquefaction and distribution, to design, construction, and operation.

All in all, Plug Power is in the top of the first inning of turning into all-in-one hydrogen energy powerhouse — and becoming what may amount to the biggest hydrogen company in the world.

Plug Power’s Strong Earnings

Plug Power’s strong third quarter earnings report largely confirmed that the aforementioned bull thesis — where Plug Power emerges as the leader of the booming hydrogen economy — remains healthily in-tact today.

The company delivered a record-high 4,100 hydrogen fuel cell systems. That’s up from 1,000 in the first quarter of 2020, and 2,800 in the second quarter. This ramp from 1,000 fuel cell deliveries, to 2,800, to 4,100 in just nine months underscores the robust momentum behind the hydrogen energy revolution today. It also underscores that Plug Power is leading this revolution.

Thanks to record delivery volumes, Plug Power reported 106% year-over-year growth in gross billings, equating to its best billings growth rate all year long. Management also raised the full-year 2020 bookings guide, and reaffirmed the company’s 2024 billings guide calling for over 250% billings growth between now and then.

Profit margins expanded to record-high levels, with adjusted EBITDA margins in the quarter hitting 19%. Thanks to this enormous margin expansion, management also reiterated its 2024 EBITDA margin target of at least 20%.

So, in the quarter, you got continued ramp in delivery volumes to record-high levels, triple-digit revenue growth and rapid margin expansion to levels which support huge profit potential in the long run.

Head to toe, the company’s earnings report was very strong, and broadly underscored that PLUG stock is a long-term winner.

Huge Upside for Plug Power Stock

PLUG stock — although it is up 545% this year alone — is far from being maxed out.

After all, this is still just an $8 billion company, that is today fundamentally disrupting the $30 billion materials handling market with a best-in-breed solution, and which has potential to disrupt the combined $350 billion materials handling, automobile and large-scale stationary markets in the future.

To that end, this company has a lot growing left to do.

Indeed, my modeling implies that Plug Power will sustain 10%-plus revenue growth over the next decade, and that this big revenue growth will couple with margin expansion to drive 15%-plus profit growth.

Assuming so, my modeling suggests that $1.75 in earnings per share is doable for Plug Power by 2030. A 20-times forward earnings multiple on that implies a 2029 potential price target for PLUG stock of $35.

Bottom Line on PLUG Stock

Plug Power stock is a long-term winner at the forefront of the emerging hydrogen economy. Long-term investors would be wise to buy PLUG stock, forget about it for a few years, and check back in 2025.