Plug Power (NASDAQ: PLUG) is on a mission to deliver sustainable energy with its innovative fuel cells. The company looks to capitalize on the renewable energy market with its hydrogen technology. According to an estimate by Deloitte Consulting, the green hydrogen market could reach $1.4 trillion by 2050, giving Plug Power massive upside potential.
Even so, the company has faced significant hurdles in recent years. After reaching as high as $75 per share in 2021, the stock has come crashing down to Earth, plummeting 97%, and has failed to recover since then. Here’s what you should consider if you are thinking of buying Plug Power (or if you already have).
Plug Power aims to position itself in the evolving renewable energy sector with its hydrogen fuel cells. As an alternative to conventional batteries, Plug Power provides clean and efficient energy with minimal carbon emissions.
The company develops products that use electrolysis to produce hydrogen from water, creating a green fuel source. Their advanced liquefaction and cryogenic systems facilitate the efficient storage and transportation of hydrogen gas, making the fuel accessible and practical for various applications.
One of its products is GenDrive, a hydrogen-powered fuel cell system engineered for material-handling vehicles, such as forklifts. And its GenSure system aims to provide a reliable backup and grid-support power solution, ensuring that crucial infrastructure remains operational during broader outages.
The company counts industry giants like Amazon and Walmart among its customers and investors, which could provide it with a steady revenue stream and longer-term growth opportunities. With support from major companies, Plug Power could be in position to benefit from the projected increase in hydrogen demand, which McKinsey estimates could rise by two to four times by 2050.
The long-term growth opportunity makes Plug Power stock appealing, but its financial situation is something to keep an eye on.
Plug Power has experienced solid top-line growth in recent years, with revenue increasing by 27% last year to $891 million. However, the current landscape paints a different picture. In the first three quarters of 2024, revenue plummeted to $437 million, reflecting a 35% decline compared to last year.
This downturn is mainly attributable to the company’s struggles with hydrogen infrastructure sales. In the current year, it completed only 11 hydrogen site installations, a stark contrast to the 41 installations from the previous year. This reduction illustrates the slower-than-anticipated development of the hydrogen economy.
