Plug Power Stock Soars on Record Q3 Results, Raised Guidance

Plug Power Stock Up 837% Since March

Plug Power Inc (NASDAQ:PLUG) has been doing what the Nasdaq hasn’t been doing lately; it’s been going higher and higher.

While the Nasdaq has been selling off on euphoria over the possibility of a COVID-19 vaccine, PLUG stock has charged higher, recently hitting a 52-week high of $25.49.

Currently trading at $23.70, Plug Power stock is up 578% year-over-year, 650% year-to-date, and a whopping 837% since bottoming in March during the coronavirus-fueled sell-off.

When I last wrote about PLUG stock, in July, it was trading at $8.22 per share. Back then, the stock got a boost after the company announced two strategic acquisitions, which also led it to raise its 2024 guidance.

As you can see in the below chart, Plug Power stock has been climbing steadily higher since then.

Recently, PLUG stock has advanced on record third-quarter results, increased guidance, strategic partnerships, and a recent capital raise, which gave the company more than $725.0 million for its growth initiatives.

Plug Power Inc also recently signed a memorandum of understanding (MOU) with Linde PLC (NYSE:LIN) to deploy its fuel cell engines in delivery vehicles.

Chart courtesy of StockCharts.com

Despite the large year-to-date gain, Plug Power stock’s outlook remains solid. The stock price could easily double or triple over the next few years.

PLUG Stock Overview

Plug Power is the leading provider of clean hydrogen and zero-emission fuel cell solutions. The company’s fuel cells are used in everything from forklifts, to vans, to buses, to semi-trucks. Plug Power expects that, one day, its products will also power aircraft. (Source: “Plug Symposium, September 2020,” Plug Power Inc, last accessed November 18, 2020.)

By the end of 2020, Plug Power expects to ship more than 40,000 fuel cells and have more than 100 fuel stations.

The company continues to be the largest buyer of liquid nitrogen on the planet, using 40 tons per day. In 2018, it surpassed NASA for liquid hydrogen use.

Plug Power Inc recently announced plans to build five green hydrogen plants in the U.S., working with strategic partners. The company has started work on the design phase of the first two plants, with expected completion by the end of 2022. Plug Power expects to have all five plants operational by 2024, with a total capacity of 100 tons per day.

Plug Power’s technology is used by Amazon.com, Inc. (NASDAQ:AMZN), Bayerische Motoren Werke AG (ETR:BMW, OTCMKTS:BMWYY),  Carrefour SA (EPA:CA), DHL International GmbH, FedEx Corporation (NYSE:FDX), Southern Co (NYSE:SO), and Walmart Inc (NYSE:WMT).

Plug Power has been leveraging its product architecture to expand into other key markets, including zero-emission on-road vehicles, robotics, and data centers.

New Products for European Markets

In October, Plug Power announced that it had expanded its “GenDrive” product line with the addition of three new fuel cell solutions designed for European industrial and material handling vehicles. (Source: “Plug Power Develops New Gendrive Products For The European Market,” Plug Power Inc, October 22, 2020.)

The new products are for Class-1 trucks up to five tons, Class-3 trucks, automated guided vehicles, and tow-tractors.

Andy Marsh, CEO, noted, “Given that Plug Power is the only major provider of hydrogen fuel cells in the European material handling market, we’re excited to be introducing new GenDrive fuel cell products to our customers in that part of the world.”

Deal with Linde PLC

In September, Plug Power announced that it had inked an MOU for the demonstration of its fuel cell engine in Class-6 and Class-8 vehicles that will be used by Linde for delivering products. (Source: “Plug Power Signs MOU with Linde for the Demonstration of Fuel Cell-Powered On-Road Vehicles,” Plug Power Inc, September 24, 2020.)

This fleet of hydrogen fuel-cell vehicles is expected to be on the road in early 2021.

In long-haul transportation, Plug Power’s “ProGen” fuel-cell vehicles provide a unique advantage over battery-electric vehicles. The fuel cells offer faster fueling (at least five to six times faster than an electrical charge), more than 500 miles of increased range, and superior packaging density.

Record Third-Quarter Performance

On November 9, Plug Power announced that its third-quarter revenue increased 80% year-over year to $106.9 million. (Source: “Plug Power Reports a Record Third Quarter in the Company’s History,” Plug Power Inc, November 9, 2020.)

Gross billings increased 100% year-over-year and 73% sequentially, to a record $125.6 million. This gross billing figure is more than 10% higher than the company’s previous guidance.

Thanks to the strong performance, Plug Power increased its 2020 gross billings guidance from $310.0 million to a range of $325.0 to $330.0 million. Management also provided 2021 gross billings guidance of $450.0 million.

Plug Power reported a third-quarter net loss of $39.3 million ($0.11 per share), versus a third-quarter 2019 net loss of $18.1 million ($0.08 per share).

During the quarter, Plug Power deployed another record 4,100 fuel cell systems and 13 hydrogen fueling stations. This reflects year-over-year growth of 130% for fuel cell units deployed.

The company’s record growth aligns with Plug Power’s target to cumulatively deploy more than 40,000 GenDrive systems by year-end, and to design, build, and operate a network in excess of 100 hydrogen fueling stations.

This all puts the company on its way to deliver its 2024 target of $1.2 billion in annual sales, $200.0 million in operating income, and $200.0 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).

Further out, analysts expect Plug Power to generate $7.4 billion in annual sales by 2030.

Analyst Take

When it comes to alternative-energy stocks, it’s tough to beat Plug Power stock and its gains this year.

As mentioned earlier, Plug Power Inc reported record third-quarter billings, increased its gross billings guidance for 2020, and provided high gross billings guidance for 2021. That bodes well for the future of PLUG stock.