By Chelsea Diana – Reporter, Albany Business Review
Craig Irwin, an analyst with Roth Capital, upgraded the Latham hydrogen fuel cell manufacturer to buy from hold on Monday morning with a price target of $6, up from a $3 price target.
"The hope has been repetitively that Plug would reach profitability. It was always promised that by the end of the year Plug would be profitable," Irwin said. "This year, it is different. This year, Plug had two quarters of positive adjusted EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization]. Fourth quarter is expected to have record revenue."
Irwin is a senior research analyst based in New York City covering Plug Power and other clean-tech companies for Roth Capital, an investment banking firm. He previously worked at First Albany Cos.
Irwin mentioned Plug's continued growth, outlook for record revenue and EBITDA in the fourth quarter and potential EBITDA profitability in 2020 as reasons for the improved outlook. He also mentioned that Ballard Power Systems Inc. — another hydrogen fuel cell company with a different business model than Plug's — has been selling at around $6.
Several other analysts that follow Plug rate it a buy right now, with an average price target of $3.75.
The last time Plug Power was worth more than $6 was in 2011 when Irwin said investors got overly optimistic about Plug's announcement it was working with Walmart. Since then, the stock has dropped as low as 14 cents in February 2013. More recently, Plug's stock (Nasdaq: PLUG) has been trading between $2 and $3.
The stock was trading at $2.92 on Monday after Roth's announcement.
Plug Power's most recent earnings showed improvement over the years of quarters with big losses. Plug reported gross billings of $61 million in the third quarter of 2019. The company still lost $13.2 million in the third quarter, but was positive $2.5 million on an EBITDA basis.
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Plug Power adds one of the world's largest automakers as a customer
Plug Power CEO Andy Marsh said the company remains on track toward its goal of $235 million to $245 million in annual revenue this year.
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Since CEO Andy Marsh joined the company in 2008, Plug Power has shifted its model from a focus on research and development to manufacturing fuel cells for the material handling industry.
Plug has shipped more than 28,000 fuel cells to dozens of warehouse customers, including Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT). And it has become the world’s largest user of liquid hydrogen, with 20 tons used daily, surpassing NASA.
The company announced an ambitious goal last month to get to $1 billion in revenue by 2024.
Plug said the growth will come from its anchor customers — including Amazon and Walmart — and the addition of one new multisite customer annually. The company expects to be selling more than 25,000 units a year by 2024. And it projects its hydrogen usage will grow to 85 tons per day.
More recently, Marsh has been mapping out a diversified future for the company beyond material handling. For example: In May, Plug secured a deal to supply hydrogen fuel cell-powered engines for 100 electric delivery trucks for DHL in Germany. The company also started a pilot program last year in which electric FedEx trucks delivering packages in the Albany area were outfitted with hydrogen fuel cells.
"This is the first time in the last 20 years that I've been following Plug that I have complete confidence they will make money in 2020," Irwin said. "I don’t know they will be profitable in 2019, but they will be very close… It's a different thing this time."
Craig Irwin, an analyst with Roth Capital, upgraded the Latham hydrogen fuel cell manufacturer to buy from hold on Monday morning with a price target of $6, up from a $3 price target.
"The hope has been repetitively that Plug would reach profitability. It was always promised that by the end of the year Plug would be profitable," Irwin said. "This year, it is different. This year, Plug had two quarters of positive adjusted EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization]. Fourth quarter is expected to have record revenue."
Irwin is a senior research analyst based in New York City covering Plug Power and other clean-tech companies for Roth Capital, an investment banking firm. He previously worked at First Albany Cos.
Irwin mentioned Plug's continued growth, outlook for record revenue and EBITDA in the fourth quarter and potential EBITDA profitability in 2020 as reasons for the improved outlook. He also mentioned that Ballard Power Systems Inc. — another hydrogen fuel cell company with a different business model than Plug's — has been selling at around $6.
Several other analysts that follow Plug rate it a buy right now, with an average price target of $3.75.
The last time Plug Power was worth more than $6 was in 2011 when Irwin said investors got overly optimistic about Plug's announcement it was working with Walmart. Since then, the stock has dropped as low as 14 cents in February 2013. More recently, Plug's stock (Nasdaq: PLUG) has been trading between $2 and $3.
The stock was trading at $2.92 on Monday after Roth's announcement.
Plug Power's most recent earnings showed improvement over the years of quarters with big losses. Plug reported gross billings of $61 million in the third quarter of 2019. The company still lost $13.2 million in the third quarter, but was positive $2.5 million on an EBITDA basis.
TRENDING
RESIDENTIAL REAL ESTATE
The wealthiest places in upstate New York, ranked
TECHNOLOGY
Plug Power adds one of the world's largest automakers as a customer
Plug Power CEO Andy Marsh said the company remains on track toward its goal of $235 million to $245 million in annual revenue this year.
HIRING IN HEALTHCARE
Physician: Family Medicine or Internal Medicine Director Job in New Yo
CompHealth
Since CEO Andy Marsh joined the company in 2008, Plug Power has shifted its model from a focus on research and development to manufacturing fuel cells for the material handling industry.
Plug has shipped more than 28,000 fuel cells to dozens of warehouse customers, including Amazon (Nasdaq: AMZN) and Walmart (NYSE: WMT). And it has become the world’s largest user of liquid hydrogen, with 20 tons used daily, surpassing NASA.
The company announced an ambitious goal last month to get to $1 billion in revenue by 2024.
Plug said the growth will come from its anchor customers — including Amazon and Walmart — and the addition of one new multisite customer annually. The company expects to be selling more than 25,000 units a year by 2024. And it projects its hydrogen usage will grow to 85 tons per day.
More recently, Marsh has been mapping out a diversified future for the company beyond material handling. For example: In May, Plug secured a deal to supply hydrogen fuel cell-powered engines for 100 electric delivery trucks for DHL in Germany. The company also started a pilot program last year in which electric FedEx trucks delivering packages in the Albany area were outfitted with hydrogen fuel cells.
"This is the first time in the last 20 years that I've been following Plug that I have complete confidence they will make money in 2020," Irwin said. "I don’t know they will be profitable in 2019, but they will be very close… It's a different thing this time."
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.