On Monday, Roth/MKM maintained its Buy rating and $9.00 price target for Plug Power (NASDAQ:PLUG) shares, a leading provider of hydrogen fuel cell solutions. The endorsement follows the company's fourth-quarter results for 2023, which were described as a period of transition. Management is currently navigating through challenges with the company's financial position.
The firm highlighted potential near-term catalysts for Plug Power, including the conditional approval of a $1.6 billion loan package from the Department of Energy (DOE), anticipated in the coming weeks. Additionally, the firm pointed to the potential for increased transparency in green hydrogen pricing as a positive sign for the company's future.
Roth/MKM noted that Plug Power has already taken steps to adjust costs, which are expected to lead to a significant decrease in cash usage by 2024. According to the firm, these measures should result in a 70% reduction in cash use for the year, which they view as a procedural outcome based on the actions already implemented.
The firm anticipates that Plug Power's efforts will be evident in the second half of 2024, with a marked improvement in gross margins. This financial progress is expected to pave the way for the company to achieve positive EBITDA (earnings before interest, taxes, depreciation, and amortization), serving as a report card for the company's strategic moves.
In summary, Roth/MKM's analysis suggests that Plug Power's strategic adjustments and the anticipated government loan could significantly improve the company's financial health and market position in the near future.
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