Contact

Plug Power – (too) many projects worldwide?

By

January 19, 2022

Image titel:

Sources:

Plug Power – (too) many projects worldwide?

Hyvia van by Renault and Plug, © Hyvia

Hyvia van by Renault and Plug, © Hyvia

Plug Power is benefiting from the fact that a variety of analysts view the company to be a front-runner in an American hydrogen economy in 2023/24 and one that should be very well positioned to produce green hydrogen through the development of its own electrolyzer capacity in the longer term. In nine years’ time, a revenue of USD 9 billion may even be possible. Until then, a hydrogen price of USD 1 per kilogram should be achievable, according to Evercore analyst James West.

The target price for the shares is between USD 42 and even above USD 70. It is clear that Plug will profit from the infrastructure program just agreed in the USA. A lot of money is flowing into R&D. Funds are also being channeled into subsidizing the price of green hydrogen (hydrogen tax subsidies/production tax credits) and supporting the expansion of the hydrogen economy along with associated applications. Plug still also has USD 4 billion in the bank underpinning its growth forecasts. So in 2022 a revenue of USD 900 to 925 million should be possible instead of USD 825 to 850 million.

Advertisements

On the other hand, it seems to me that it is far too highly dependent on individual key accounts like Amazon. Although it is seeing high billing levels (orders to convert forklift trucks), these do not allow it to achieve satisfactory profit margins. Some stacks are being exchanged. Ballard Power is probably still profiting from this as it was in fact Ballard that supplied Plug with stacks in the early years before Plug Power itself started production in “gigafactories” (see Ballard’s last quarterly results).

Interesting news like the planning of a feasibility study for deployment in the aerospace industry with Airbus should surely be assessed in a very positive light – although in my view orders will not arrive overnight. Clearly positive news is that Plug Power and oil corporation Phillips66 are planning a joint venture to expand hydrogen infrastructure.

Advertisements

Conclusion: Plug’s valuation at about USD 24 billion is entirely appropriate and has already factored many positives into the share price performance. The shares will track the positive sentiment which is expected to continue compared to the entire market segment of hydrogen and fuel cell stocks. I remain cautious because, to me, many of the words being uttered by companies seem like they are really meaningless. My view remains that Plug should take stakes in Nikola Motor and Hyzon Motors. This is a way that Plug could position itself in the commercial vehicle industry (in addition to the partnership with Renault for cargo and passenger vans) together with expanding the hydrogen infrastructure – although that is only a strategic observation of mine that I have expressed frequently here.

Risk warning

Share trading can result in a total loss of your investment. Consider spreading the risk as a sensible precaution. The fuel cell companies mentioned in this article are small- and mid-cap businesses, which means their stocks may experience high volatility. The information in this article is based on publicly available sources, and the views and opinions expressed herein are those of the author only. They are not to be taken as a suggestion of what stocks to buy or sell and come without any explicit or implicit guarantee or warranty. The author focuses on mid-term and long-term prospects, not short-term gains, and may own shares in the company or the companies being analyzed.

Written by Sven Jösting December 7, 2021

Here are interesting and current articles on the topic of hydrogen – stocks and the stock market!

Economic prospects for companies in the hydrogen sector | Future, stocks & hydrogen companies on the stock exchange and more…

Which hydrogen companies will prevail in the competitive market in the long term? Get tips and cartwheels and learn more about risks or opportunities. Our stock market specialist and expert author Sven Jösting reports critically, independently and competently.

Feb 28 2024

H2Direkt: Blueprint for heating with pure H2

The energy providers Thüga und Energie Südbayern (ESB) as well as Energienetze Bayern have...
Feb 26 2024

Just switch over?

Hydrogen in the existing natural gas network Whether hydrogen contributes to the clean heating...
Feb 26 2024

Pilot plant for coating bipolar plates

At Fraunhofer FEP (Fraunhofer-Institut für Organische Elektronik, Elektronenstrahl- und...
Feb 20 2024

55 MW electrolyzer to decarbonize Saarland

Hydrogen Regions series: HydroHub Fenne living lab The power plant site in Fenne, Völklingen, a...
Feb 20 2024

Chicken feathers as FC membrane material

Feathers from chickens or other poultry could in the future help make fuel cells more effective...
Feb 15 2024

SMEs demand more security

Guest article by André Steinau, CEO of GP Joule Hydrogen After all, the Ampel Coalition leading...
Feb 15 2024

Accelerated expansion of renewable energies

RED III is here – Elsewhere, the wait continues Progress is being made at EU level – albeit...
Feb 12 2024

Picea 2 relies on lithium instead of lead

HPS presents new product generation The company HPS Home Power Solutions has unveiled a new...
Feb 12 2024

H2 production by photocatalysis

The direct generation of hydrogen from sunlight has long been considered the most elegant solution...
Feb 05 2024

Regional instead of international

Hy-Fcell has it difficult asserting itself The aspiration of Landesmesse Stuttgart with Hy-Fcell...
Feb 01 2024

Hydrogeit Verlag turns 20 years old

Hydrogeit Verlag is proudly celebrating its 20th anniversary as a renowned specialist publisher in...
Jan 26 2024

Stracke other H2Now managing director

BMV Energy GmbH is entering the market as another player in hydrogen refueling stations. The...
Jan 26 2024

Starting points for a comprehensive hydrogen ramp-up

Industry congress GAT 2023 in Cologne To establish a functioning hydrogen economy, the entire...
Jan 26 2024

The industry highpoint in autumn

Hydrogen Technology Expo total success In autumn 2023 as well, the Hydrogen Technology Expo was...
Jan 22 2024

New management for the northern real-world lab

Obituary for Professor Werner Beba Mike Blicker will be the new project coordinator of the...
Jan 22 2024

Axel Funke moving to Apex

The Apex Group is expanding its management team from five to six people. Starting the new year,...
Jan 16 2024

Weichai Power: Strong share price increase

The share price of Weichai Power has risen by almost 50 percent in the last few weeks. The reason...
Jan 16 2024

Siemens Energy: Ideal candidate for “buy on bad news”

What should be read from: “Siemens Energy rescued.” Was the company on the verge of bankruptcy? By...
Jan 16 2024

Plug Power: Facts offer little hope

The turnover in the amount of 198.7 million USD in the third quarter lay considerably below...
Jan 15 2024

Nikola Motors: Capital increase at the right time

Short sellers are working massively against the company at the stock exchange. There were shortly...

1 Comment

  1. myhome

    I agree with your point of view, your article has given me a lot of help and benefited me a lot. Thanks. Hope you continue to write such excellent articles.

    Reply

Leave a Reply