Plug Power Inc. (NASDAQ:PLUG) Has the Drive to Carry On

Tuesday, September 15, 2020 | Steve Anderson

Plug Power Inc. (NASDAQ:PLUG) Has the Drive to Carry On

For those who remember those dark days, not so long ago, when even regular unleaded gasoline was running over $4 a gallon, the drive to find an alternate way to drive a car is understandable and even relatable. No one wants to go back to those days, except perhaps those who are long oil. That's led to an advance in electric cars, and even in cars powered by burning hydrogen. Right now, one of the leaders in the hydrogen fuel cell market is Plug Power Inc. (NASDAQ:PLUG), and it's looking to be one of the biggest movers in a market that still has plenty of room to grow.

A Coronavirus-Resistant Stock

One of the biggest points in Plug Power's favor comes from taking a look at its one-year chart. The COVID-19 dip that took place for virtually every stock on the exchanges didn't really happen here. In a sense, it did, but in another very real sense it did not.

When February rolled around, Plug Power was valued at $3.85 a share. It climbed to $5.72 on February 19, and then started a catastrophic plunge down to its lowest point of the year on March 26, where it hit $2.76 per share. Percentage-wise, the company lost nearly half its value. Objectively, the company lost just under $3 per share. If Apple (NASDAQ: AAPL) had posted similar losses we probably wouldn't even be talking about it.

Better yet, the company didn't even stay at those levels for long; by April, the company was back up to where it was before COVID was even a thing. On April 8, it recovered to $3.82 per share, and then, about two months later in June, started a massive upward climb that looks like it's still going to this very day.

The Analysts are Happy

Some might call Plug Power a tremendously resilient stock as a result of bouncing back from losing just over half its value in the space of a month. Indeed, our own research finds that analysts are pretty happy with this operation, with 12 firms covering Plug Power, and most of them squarely advising anyone who will listen to buy-in.

Just one analyst has a “sell” rating on the stock, and two are a bit less cautious with “hold” ratings. Seven, meanwhile, carry a “buy” rating and one has a “strong-buy”. Most recently, Odeon Capital Group stepped in with a “buy” rating, and that's not all. Several analysts are hiking their price targets for the stock, and in many cases, these targets are at lower levels than those at which the stock is currently selling.

Plug Power Picks Up Fresh Charge from Analysts

Morgan Stanley, for example, has a new price target of $9.50 on the stock, up from its previous $8.50. B. Riley upgraded from $7 to $8, and Canaccord Genuity went from $7 to $8.50.

While there has been some somewhat distressing move from insiders to sell—back in June, the chief operating officer Keith Schmid sold 169,379 shares of stock, and one of the company's directors, Maureen O. Helmer, sold a similar amount at 150,164 shares the same day Schmid did—there has been encouraging response from funds. BlackRock Inc. bolstered its position a full 27.3 percent, with just over 27 million shares to its credit, and Vanguard Group now owns over 16 million shares following a 7.6 percent increase in buying.

A Positive Forward Outlook

The funds seem pretty sure something positive is afoot for Plug Power, and given the recent gains in the stock price, they may well be right. Some reports note that Plug Power is well on its way to making deals with Home Depot and Walmart to bring hydrogen fuel cells to the market; a connection with Walmart is particularly valuable as it not only represents a major US retailer, but also retailers all over the world. In fact, Plug Power made its deal with the Asda subsidiary of Walmart, which gives Plug Power access to the UK market and potentially more from there. Deals with BMW and Amazon are also said to be in the works, which could make Plug Power a very big deal in the near term.

Of course, this also assumes that there will be hydrogen-powered items available in sufficient quantity to make hydrogen fuel cells worthwhile. After all, you can make the best flashlight batteries on Earth, but if there are no flashlights available, what's the point? The steady growth seen in the electric vehicle market seen recently suggests there's plenty of ground to work with; the rise of companies like NIO (NYSE:NIO) and Nikola (NASDAQ:NKLA) proves that much out.

 

Should you invest $1,000 in Plug Power right now?

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Companies Mentioned in This Article

CompanyMarketRank™Current PricePrice ChangeDividend YieldP/E RatioConsensus RatingConsensus Price Target
Plug Power (PLUG)2.3$27.28flatN/A-19.77Buy$44.03
Nikola (NKLA)2.1$11.87flatN/A-8.92Hold$22.13
NIO (NIO)1.8$44.68flatN/A-47.53Buy$57.61
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