There are plenty of ways to wager on clean energy. One of the more interesting and sometimes controversial companies in this space is Plug Power (NASDAQ:PLUG). Just the mention of PLUG stock can spark a heated debate about fossil fuels and asset bubbles.
Some skeptics would contend that PLUG stock has flown too high, too quickly. I would counter this by pointing out that every dip in PLUG has been bought up. And, another dip-buying opportunity has presented itself in mid-October.
Plug Power will report its third-quarter 2020 earnings data on Nov. 5. However, you don’t have to wait until that day to start accumulating PLUG shares.
If you claim to believe in the future of carbon-free energy sources, it’s time to put your money where your mouth is. Plug Power is advancing hydrogen power with a plan that should convince the doubters that this little fuel cell company has come a long way.
PLUG Stock at a Glance
We’ve seen price corrections in PLUG stock before and surely we’ll see them again. For instance, there were price dips in March, July and September, after which the bulls bid the stock back up.
Some people might claim that the PLUG share price got ahead of itself in late September and early October. That’s a fair point, and indeed, PLUG stock pulled back to the $15 level. This doesn’t have to be seen as a bad thing.
After all, stocks don’t just go up in a straight line. It’s perfectly normal for stocks to move like a series of stairsteps. As long as the higher lows and higher highs persist, there’s no reason to worry about PLUG stock.
The Nov. 5 earnings report could throw a wrench in the works, so be advised that you don’t need to take a large pre-earnings position. It could make more sense to own some shares prior to earnings and then decide afterwards if you’d like to build your position.
A Vision of Profitability
What the naysayers should know is that Plug Power’s vision of generating revenues from clean hydrogen power isn’t just a pipe dream. This company has very specific targets when it comes to profitability.
After acquiring two hydrogen companies, United Hydrogen Group and Giner ELX, Plug Power raised several of its 2024 fiscal targets: “$1.2 billion in revenue (up from $1 billion) … $210 in operating income (up from $170 million … [and] $250 million in adjusted EBITDA (up from $200 million).”
These are big numbers, but Plug Power has the wherewithal to meet them. As reported by Plug Power, United Hydrogen “has the capability to produce 6.4 tons of hydrogen each day with plans to increase that capacity to 10 tons daily in the near future, as well as plans for further expansion.”
Mapping It Out
Plug Power earned $223.75 million in revenues last year, but that’s really just a drop in the bucket compared to what lies ahead.
In tandem with other pro-hydrogen companies, Plug Power is working to promote the formal launch of a McKinsey study titled “Road Map to a US Hydrogen Economy.”
This study suggests that hydrogen can meet 14% of energy demand in the United States by 2050. Also by that year, the U.S. hydrogen economy could generate around $750 billion per year in revenues and create 3.4 million jobs.
If that’s too far out in time, then consider this: According to the McKinsey report, by 2030, “the hydrogen economy in the US could generate an estimated $140 billion per year in revenue and support 700,000 total jobs across the hydrogen value chain.”
The future doesn’t have to work out exactly like what’s mapped out in the McKinsey report. Regardless of the precise outcome, there hydrogen economy should translate to a major increase in revenues and jobs, not only across the U.S. but at Plug Power in particular.
The Takeaway
Plug Power is precise in its vision for a cleaner and more profitable future with hydrogen-sourced power. Before or after earnings, you can take a position in this ambitious vision by owning shares of PLUG stock.
On the date of publication, Louis Navellier had a long position in PLUG. Louis Navellier did not have (either directly or indirectly) any other positions in the securities mentioned in this article.
The InvestorPlace Research Staff member primarily responsible for this article did not hold (either directly or indirectly) any positions in the securities mentioned in this article.
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.
