Plug Power is under the microscope before earnings. Here’s what to expect

It’s almost time for Plug current (PLUG) to join the winning party. Once market action wraps up today, the hydrogen specialist will deliver its latest quarterly report.

The stock has been under pressure recently, having fallen 24% in the past month alone. The decline is largely the result of a reduction in expectations for the full year in mid-October. PLUG now expects to complete several major projects in 2023 instead of this year, and the company said it sees revenue for 2022 coming in 5% to 10% below the $900 million to $925 million expected in August.

That prompted some revisions from Truist analyst Bronson Fleig, who lowered his 2022 revenue forecast from $912 million to $848 million. However, the analyst expects revenue growth from delayed projects to shift to 2023 and raised his revenue estimate for next year to $1.63 billion from $1.57 billion previously. “We believe the lower ’22 outlook is not indicative of demand destruction for PLUG’s H2 products, but rather a questionable supply chain backdrop,” the analyst commented.

As for the third quarter, Fleig expects $254 million in revenue and a gross margin of -5%. The Street has $258 million and -4%, respectively.

Elsewhere, PLUG recently pointed out how it stands to gain from the Production Tax Credit (PTC) in the Inflationary Reduction Act (IRA), which the company says defines the green H2 as “more economical” than any form of gray H2 and should result in “lower TCO (total cost of ownership) across the entire H2 application ecosystem.”

That the company is in the “best position” among bonds to reap the benefits of IRA and those other policies is “well understood by the market,” Fleig says. However, PLUG still has a lot to prove that it makes good on its promises.

“Considering the large role that green H2 and electrolytes play in PLUG’s new ’26-’30 outlook (about 60% – 70% of revenue year-on-year), in order to boost investor confidence in these long-term goals , we believe the market will need to see steady progress in step-up deals and large-scale electrolyte orders,” the analyst summarized.

For now, Fleig maintains a Hold (ie, Neutral) rating although he might as well have said Buy, as his price target is at $32, suggesting the shares have room for 115% growth over the next year. (To follow Fleig’s history, Click here)

Looking at the consensus analysis, with 13 Buys and 6 Holds, the analyst view is that this stock is a moderate buy. The Street’s average goal is practically the same as Fleig’s. (See Plug Power Stock Prediction on TipRanks)

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Disclaimer: The views expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.

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