Shares of hydrogen fuel cell (HFC) specialist Plug Power (NASDAQ:PLUG) popped higher on Tuesday before dipping slightly following a key hiring announcement. The company announced that Dean Fullerton will step in as the new Chief Operating Officer. Previously, Fullerton worked at Amazon (NASDAQ:AMZN), where he led engineering services for North America, Europe and emerging markets. Though the announcement drew positive attention to PLUG stock, the underlying business environment remains challenging.
According to the company’s press release, as the new COO:
“Fullerton will collaborate with the executive team to develop and implement strategic plans, identifying growth opportunities and operational improvements. In his position he will have global responsibility for project execution, manufacturing, supply chain and hydrogen generation.”
Management noted that the COO role will be instrumental in steering the firm toward its strategic objectives while maintaining high efficiency.
Plug Power CEO Andy Marsh stated that appointing Fullerton to COO represented a “landmark hire.” Further, Marsh emphasized that because the engineering specialist was a long-time client, the two enjoyed a strong working relationship. In particular, the head executive hopes to leverage the newfound expertise to help scale its vertically integrated green hydrogen ecosystem.
PLUG Stock Faces Uphill Battle for Credibility
Although Plug’s hiring of Fullerton — who spent 14 years at Amazon — should be a net long-term positive for PLUG stock, that by itself may not exempt the underlying business from the credibility challenges it faces. While the green hydrogen market is a promising one, it hasn’t always been beneficial for stakeholders.
According to Grand View Research, the sector reached a valuation of $3.2 billion in 2021. Experts project that between 2022 and 2030, the segment may expand at a compound annual growth rate of 39.5%. At the culmination point, the ecosystem could be worth $60.56 billion. With PLUG stock carrying a market capitalization of less than $2 billion, a massive total addressable opportunity exists.
Unfortunately, the hydrogen specialist has not been able to convert the opportunity into tangible results for longtime stakeholders. Since the start of the year, PLUG stock dropped 48% of equity value. In the past 52 weeks, it hemorrhaged almost 82%.
Adding to the skepticism, analysts aren’t exactly optimistic about the enterprise. Right now, PLUG stock carries a consensus hold rating. This assessment breaks down as six buys, 11 holds and four sells. The one positive is the average price target, which stands at $4.39, implying a growth potential of roughly 76%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
