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Plug Power target cut to $3, maintains buy rating

Published 2024-11-14, 01:18 p/m
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Thursday, Craig-Hallum revised its price target on shares of Plug Power (NASDAQ:PLUG) to $3.00, down from the previous target of $4.00, while reiterating a Buy rating on the stock. The adjustment followed Plug Power's 6th annual symposium in Slingerlands, NY, where the company showcased its comprehensive offerings within the hydrogen ecosystem and reaffirmed its commitment to achieving operational excellence.

During the event, titled "Plug Doing Real Things," Plug Power's senior management and industry stakeholders engaged in discussions about the company's significant customer base and commercial momentum. The symposium also focused on Plug Power's strategic objectives, including its goals for 2025, which feature an initial revenue guide below Wall Street estimates, and ambitions for growth and profitability extending into 2030.

Despite uncertainties in the market and political environment, Plug Power expressed confidence in the regulatory landscape and anticipates securing funding from the Department of Energy in the near term. The company's revised 2025 guidance is seen as a potential turning point for Plug Power to meet or surpass Street estimates after a considerable period.

The firm's note further detailed the symposium's proceedings and provided insights into the third quarter of 2024 results and updated guidance for the year, which were disclosed on November 12, 2024. The analyst suggested that for significant shareholder value appreciation, it is crucial for Plug Power to not only achieve its 2025 goals but also to demonstrate a credible path toward long-term profitability.

In other recent news, Plug Power has encountered several significant developments. Analysts at B.Riley and Piper Sandler have lowered their price targets for Plug Power, while maintaining their Buy and Underweight ratings respectively. This adjustment comes after Plug Power's annual Symposium, where the company presented a lower than expected 2025 revenue projection of between $850 million and $950 million.

The company also reported a decrease in Q3 revenue to $173.7 million, a 13% drop from the previous year. However, the GAAP gross loss for the quarter shrank to $100 million, indicating an improvement in its margin profile. Amid these developments, Plug Power announced a private placement of an unsecured convertible debenture worth $200 million, which may provide additional capital for its operations.

BTIG downgraded the company's stock from Buy to Neutral due to slower than expected global hydrogen demand growth. Meanwhile, BMO (TSX:BMO) Capital Markets and Evercore ISI reduced their price targets for Plug Power's stock, but maintained their respective Underperform and Outperform ratings. H.C. Wainwright maintained a Buy rating on Plug Power shares despite the decline in Q3 revenue.

InvestingPro Insights

As Plug Power navigates its ambitious goals for 2025 and beyond, recent InvestingPro data offers additional context to the company's financial situation. With a market capitalization of $1.8 billion, Plug Power's stock has experienced significant volatility, reflected in its 56.22% year-to-date price decline and a 42.73% drop over the past six months.

The company's financial health presents challenges, as highlighted by InvestingPro Tips. Plug Power is "quickly burning through cash" and "may have trouble making interest payments on debt," which aligns with the analyst's emphasis on the importance of demonstrating a path to profitability. The company's negative gross profit margin of -82.46% and operating income margin of -162.76% for the last twelve months ending Q3 2024 underscore these concerns.

However, it's not all gloomy. An InvestingPro Tip notes that "liquid assets exceed short term obligations," suggesting some financial flexibility. Additionally, "3 analysts have revised their earnings upwards for the upcoming period," which could indicate some optimism about the company's future performance.

For investors seeking a more comprehensive analysis, InvestingPro offers 13 additional tips for Plug Power, providing a deeper dive into the company's financial health and market position.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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