Plug Power (NASDAQ:PLUG) went public in 1999 and, while that resulted in a joyful ride in the first few months, it ended in exactly the way you might expect. More than a decade later, Plug Power stock was changing hands at less than $1.
Even at the start of 2020, shares were in the range below $5. But now, Plug Power is coming back to life and its stock price of nearly $28 is evidence of that. The company notes on its site:
“Plug Power is enabling the paradigm shift to an electrified world by innovating clean, cutting-edge hydrogen fuel cell solutions across a broad spectrum of transportation, aerial, and stationary applications. Now, users can operate sustainably, consistently and efficiently.”
With the momentum in electric vehicles (EVs) and the demand for clean energy rising, it’s no wonder Plug Power has come back to life. So, let’s dig a bit deeper on this name.
Demand Continues to Climb for Plug Power Stock
Demand for a company’s product can be directly identified by looking at its revenue. Either the business has sales or it doesn’t and those sales are either growing or they’re not.
In the case of Plug Power, it has both sales and growth.
Analysts expect revenue to ring in at around $324 million this year, up nearly 37% from 2019. That’s not bad for a year plagued by the pandemic. What’s more, in 2021, analysts expect another strong year of growth, up almost 36% to $440 million.
Going out multiple years can be difficult when it comes to analyst expectations. That’s because so much can change in one year, let alone two. However, the outlook for 2022 is equally impressive, calling for revenue of over $567 million.
Naturally — if this company can go from $238 million in sales in 2019 to $440 million in 2021 — Plug Power stock is definitely going higher.
And there’s no signs of it dwindling so far. For instance, demand remained strong in the most recent third quarter as well. That’s reflected in management raising its 2020 gross billings guidance from $310 million to a range of $325 million to $330 million. That was after a record Q3 billings result.
Management remains bullish on the long term too, saying:
“Considering our 2021 gross billing guidance of $450 million, which we are also reaffirming, we believe we are well on our way to deliver on our 2024 targets of $1.2B in gross billings, $200M in operating income, and over 20% Adjusted EBITDA.”
$1.2 billion in gross billings? We still have to see it to believe it, but if that’s the case, one can see why the dips are being bought in Plug Power stock.
Bottom Line
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Of course, raising capital can have a negative effect in the form of debt or stock dilution, depending on how a company adds cash to the coffers. In Plug Power’s case, though, I love that the company raised additional funds in November.
Why? For one, the company was on solid financial footing previously, with total current assets of $778 million easily outweighing current liabilities of nearly $264 million. Total assets of $1.5 billion also easily topped total liabilities of about $883 million.
However, that didn’t stop Plug Power from raising approximately $1 billion additionally, “bringing total cash post-closing balance to $1.7 billion.”
In a nutshell, this is a company with a proven model for demand, an improving bottom line and a reinforced balance sheet. No wonder Plug Power stock has had so much life this year. That’s also why we want to continue buying the dip. The move to green energy has never been stronger in the U.S. and abroad. As a result of those trends, the names that will continue to fuel these movements are solid investments.
So, Plug’s business has momentum and so does it stock. Have a look at the chart above. Notice how the 50-day moving average went from resistance in March to support in April.
Since then, it has continued to buoy Plug Power. That trend will not last forever — it never does for any pick. However, on a dip to this area and with support near $22, it may be a reasonable spot for bulls to nibble on the stock.
On the date of publication, neither Matt McCall nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
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