Over the course of the past year or so, hydrogen fuel cell company Plug Power (NASDAQ:PLUG) has seen it’s stock scale new highs. Much of the positivity around the stock is possibly tied to the turnaround in the business and the company’s pronouncements with regards to its long term revenue and profit targets. In such a situation, it is important for investors to perhaps take a deeper look at Plug Power’s business and prospects.
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Third Quarter Results
The possibilities of the company’s turnaround and its claims of being on track with its long term targets are going to become clearer to investors when Plug Power reveals its financial results for the third quarter on November 5.
If the company can manage to grow at its current rate in the third quarter, then perhaps the strong rally in the Plug Power stock stands justified. Even a year or so ago, the company commanded a very tiny market share in the clean energy space.
However, one of the important things in Plug Power’s favor was that it did generate revenue and the figure is now growing. In the 2019 financial year, the company generated revenues of $233.75 million and at this point, it seems that Plug Power is well placed to grow it in 2020.
Profitability
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Despite the growth in revenues, Plug Power is not a profitable business yet. However, it cannot be denied that the company is actually moving in the right direction.
In 2019, Plug Power delivered a loss per share of 38 cents. However, in 2020, the company is expected to reduce the loss per share to 28 cents. The reason for the dramatic turnaround in Plug Power’s fortunes lies in the fact that there is considerable momentum in the clean energy sector.
Experts believe that hydrogen fuel cells are not actually competing with batteries. Instead, it is a better option for heavy-duty machines and vehicles that are used over longer distances. It is interesting to note that companies like Amazon and Walmart already use Plug Power’s batteries for its forklifts.
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Prospects
Over the past three years, the company managed to grow its assets by as much as 65.2%. On the other hand, revenues rose by 45.4% (CAGR) during the same period.
In addition to that, it is also necessary to note that the company has also signed significant deals.
At this point, it has standing agreements in place to build hydrogen fuel propelled commercial aircraft for EnergyOR and Universal Hydrogen. Investors could do well to keep an eye on the stock and especially on the company’s third-quarter results.
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