With an environmentally friendly Democratic presidency increasingly likely, now maybe the time to buy shares of Plug Power (NASDAQ:PLUG) stock.
The Latham, New York-based manufacturer of hydrogen fuel cell systems that replace conventional batteries in equipment and vehicles that are powered by electricity could be a beneficiary of Joe Biden’s proposed $1.7 billion green energy infrastructure plan should the former vice president win the White House.
PLUG stock is already benefiting from the rise of electric vehicles and the resurgence of the green movement, up a massive 580% since March to about $20 a share. The prospect of a Biden presidency led the stock to jump 13% on Nov. 5 to its current level. Investors looking for growth in their portfolio might want to grab shares of Plug Power while they’re still trading under $25.
The Return of a Tech Darling
While it has seen blockbuster returns in 2020, PLUG stock is not new. The company has been around since 1997 and went public in 2002. The stock was a high flying darling of the technology sector in the 2000s. But the stock lost nearly all of its value in the 2008 financial crisis and as interest in hydrogen fuel cells waned.
However, thanks to investments from Amazon (NASDAQ:AMZN) and Walmart (NYSE:WMT), Plug Power has succeeded in developing electric indoor forklifts that are widely used by leading companies such as Home Depot (NYSE:HD), Nike (NYSE:NKE) and Kroger (NYSE:KR).
Now, a number of automakers, including Toyota (NYSE:TM), are knocking on Plug Power’s door looking to use its hydrogen fuel cells in their electric vehicles. Plug Power’s fuel cells can be used in the transportation, telecommunications and utility sectors. This is great news for PLUG shareholders.
Strong Financials and Contracts
In terms of its financials, Plug Power has been strong and getting stronger. The company’s second-quarter revenue increased 18.3% year-over-year to $68 million. Adjusted EBITDA increased 112.6% from the same period last year to $1.2 million. And Plug Power recorded record gross billings of $72.4 million in the second quarter. Analysts forecast that PLUG stock’s earnings per share (EPS) will increase 22.2% this year and 17.9% in 2021. Revenue is forecast to rise 33.1% in 2020 and 34.8% in 2021.
Plug Power also signed several beneficial contracts in recent months. The company inked GenDrive fuel cell contracts for European industrial and material handling vehicles. It partnered with Apex Clean Energy to develop a green hydrogen network across the United States using wind power. And, Plug Power signed a memorandum of understanding for demonstrating Plug Power’s ProGen fuel cell engine in class six and class eight vehicles that are expected to hit the market in 2021.
Buy PLUG Stock
A lot of things are moving in the right direction for Plug Power.
With its hydrogen fuel cell technology back in favor, a green technology revolution underway, and a friendly administration likely to occupy 1600 Pennsylvania Ave., now is the best time in the past 10 years to buy PLUG stock.
While the share price has enjoyed an astronomical run this year, it remains relatively affordable at around $20. And it is likely to continue running higher in the coming months. Plug Power is a buy.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article.
Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.
