Plug Power Optimistic About 2022 But Stock Drops 8%

Plug Power Optimistic About 2022 But Stock Drops 5% - Carbon Herald
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Hydrogen tech company Plug Power (NASDAQ:PLUG) gave a bullish 2022 sales guidance on Wednesday with a target between $900 and $925 million. The stock, however, dropped 8% as many investors seem to be unconvinced about the ability of the company to turn its expansion into profit.

The backdrop for this was the bad day the Nasdaq index was also having. The tech index lost 1.15%, formally entering a correction. The index is now 10.7% below its high registered on November last year.

Still, many Plug Power investors were happy with what they learned from the company meeting.

A further expansion of the relationship with Stellantis was announced and the majority of existing customers have increased their orders for fuel cells.

The company also shared that they are in negotiations with three potential big clients that could compare in terms of revenue with the existing five.

Ambitious goals for expanding into transportation by providing fuel cells for trucks and cars was also expected with the company taking the initiative and starting to build its own infrastructure to support this.

Relevant: Plug Power And Edison Motors To Mass-Produce Hydrogen Buses

To become the world’s #1 producer of green hydrogen, real estate across California, Texas, New York and Georgia are being prepared for plants that will supply a national network for hydrogen production and distribution.

Plug Power also hopes to reach a daily production volume of 70 tons of green hydrogen daily next year. The goal for 2025 is to make 500 tons, which should be able to cover the growing needs of a market that is expected by many to see rapid growth in the next years.

The acquisition of energy company Joule Energy for $30 million was also announced. According to CEO Andrew Marsh, this purchase will save ~25% of costs for running Plug’s hydrogen liquifiers, something that should save $200 million in the next four years, as ramping up production will become a reality.

Plug Power Stock Growth

But the question for many still remains if all this growth can be done with sustainable profit margins. Q3 results delivered a $106 million loss and the stock has dropped 86% in the last 12 months.

Marsh expects scale to reduce costs and improve margins, while being able to explore different revenue streams. $600 million is expected to come from the material handling, $150 million from electrolyzer sales, $75 from new markets (like Australia) and the final $100 million from benefits as a result of acquisitions.

Markets didn’t feel as upbeat as the CEO.

The technology-focused index lost 1.15% on Wednesday, dragging it 10.7% from its most recent record close in November 2021. 

The Plug Power stock shed 8.06% during Wednesday’s session and continued a downtrend that has been active since November last year.

Dropping around 50% since then, short sellers seem in control here and the next levels to watch are the low from May at $18.47 and $13.69 which was last seen in October 2020.

More about hydrogen stocks: What Are The Hottest Top 5 Hydrogen Stocks?

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