Contact

Plug Power – Still not a must-buy

By

October 11, 2023

Image titel:

Sources:

Plug Power – Still not a must-buy

Plug Power reports on a variety of projects related to hydrogen, its production, use and future markets in which it is active and feels it is a frontrunner. Company representatives talk about an H2 production facility in Georgia that is the largest of its kind in the USA. They’re active everywhere – in stacks, cryotechnologies (liquefaction), electrolyzers and hydrogen-powered vehicles.

The figures, though, speak a completely different language: Turnover indeed grew by a remarkable 70 percent to over 260 million USD in the second quarter. But the quarterly loss likewise increased 58 percent to minus 236.4 million USD, or 0.40 USD per share (minus 0.26 USD per share was the expectation for the Q2). Liquidity decreased noticeably to only about 1 billion USD, so the CFO expects that Plug needs in the next 12 to 18 months between 1 and 1.5 billion USD in new liquid capital.

Advertisements

Is an offering (share placement) coming soon or will a credit of over 1 billion USD be given by the DOE (Department of Energy) via the Inflation Reduction Act? Best could be a convertible bond at the value of 1 to 2 billion USD, as large funds are focusing especially on green bonds that fit with the sustainability theme and the company has sufficient capital. The stock market, meanwhile, appears skeptical and has let the share price plummet.

“By the end of 2023 we aim to generate 1.4 billion dollars (USD) in revenue, commission more than 200 tonnes of liquid green hydrogen plants and become the largest global player, exceed 400 million dollars in electrolyzer sales, deploy 30 megawatts of stationary power products, which will serve as a substantial source of recurring revenue for Plug and finally clearly demonstrate the path of profitability for all our investors.”

Advertisements

                                        Plug quarterly report

That’s a lot of nice talk – but realistic? The forecasts are maintained: 1.2 to 1.4 billion USD turnover is taken as the target for the entire year 2023. The plans are huge. Alone in the business area of electrolysis, a capacity of 7.5 GW will be expected. The current figures (order book with about 224 million USD for electrolysis) speak a different language. The target level corresponds to a sales potential of up to 5 billion USD. Realistic? When?

There are many new sites in the world where hydrogen could be used in forklifts – the basis of their business with customers like Amazon and Walmart. But Plug needs to produce the liquefied hydrogen itself and earn money from it instead of buying it, even at a loss, from third parties, is my assessment. Otherwise, each new customer brings a loss with it, is my subjective view.

Plug calculates the price for hydrogen based on 0.03 USD per kWh in the USA as 2.75 USD per kg. In Europe, because of the imposed conditions and the price of electricity, around 0.75 USD per kg higher. If costs such as liquefaction and transportation are included, however, then 4.50 to 5 USD per kg is a realistic basis. Here, the subsidy via the US Inflation Reduction Act of 3 USD per kg will have a positive impact (profit margin).

Summary: Plug Power will require still longer before the share can be recommended as a buy. After placement of a convertible bond (my expectation/prediction). And then sufficient liquidity for all the ambitious plans must be reassessed. The company has very good potential to become a top player in the hydrogen sector. One should still be critical, however, since Plug is working on a large number of projects (building up capacity) in parallel, possibly positioning itself too broadly, and this at many different construction sites at the same time, and then also internationally active. Less is more, I would say. The company is for me – after studying the 10-Q (quarterly report) – too little transparent. Starting 7 USD, I’d consider the share.

Disclaimer

Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Author: Sven Jösting

Kategorien: News | Stock market | worldwide

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...

0 Comments

Trackbacks/Pingbacks

  1. Plug Power – Still not a must-buy – h2-tracker - […] Plug Power reports on a variety of projects related to hydrogen, its production, use and future markets in which…

Leave a Reply