## Plug Power (PLUG) Faces Headwinds Despite Ambitious Green Hydrogen Goals: JPMorgan’s Take
Plug Power, a leading player in the green hydrogen revolution, has set its sights on a future powered by this clean energy source. The company boasts ambitious growth plans, aiming to double its revenue in the latter half of 2024. But according to JPMorgan analyst Bill Peterson, navigating this path to success won’t be smooth sailing.
Peterson expresses a cautiously optimistic view, acknowledging Plug Power’s exciting vision but highlighting potential roadblocks in the near term. While the company targets substantial growth in its energy business, particularly in the material handling and electrolyzer equipment sectors, several factors could impact its performance.
The sluggish U.S. hydrogen market and lingering uncertainties surrounding the 45V tax credit could put pressure on Plug Power’s earnings. Peterson predicts that the company might fall short of its growth targets in the upcoming quarter, failing to reach the high double-digit growth necessary to meet its guidance range.
However, the upcoming Plug Symposium, scheduled for November 13th, offers a platform to address these concerns. This event will showcase Plug Power’s long-term roadmap, potentially unveiling its vision for achieving a remarkable $20 billion in revenue by 2030. While Peterson acknowledges this ambitious goal, he emphasizes the practical challenges that lie ahead.
The Symposium will likely feature compelling case studies showcasing the diverse applications of hydrogen in various sectors, including mobility and stationary power. However, the crucial question remains: Can Plug Power’s green hydrogen network translate into substantial profits? With growing skepticism surrounding the commercial viability of hydrogen, the company must demonstrate the network’s profitability to gain investor confidence.
Looking at the short-term outlook, Peterson remains hesitant about Plug Power’s ability to meet its guidance, citing ongoing political uncertainty as a significant factor. The stock currently faces a 28% short interest, reflecting a wider market wariness. However, a decisive policy change or unexpected loan approvals could shift investor sentiment.
For now, the pressure is on Plug Power to achieve meaningful margin improvements and strengthen its cash flow management. These steps are crucial for attracting long-term investors. Despite the challenges, Peterson maintains a neutral stance on PLUG, recognizing the potential long-term upside if hydrogen gains a foothold in the energy landscape.
While Plug Power’s commitment to a green hydrogen future is undeniably admirable, the company faces tangible challenges that can’t be ignored. Investors must be prepared for a potentially volatile journey, acknowledging both the risks and the potential rewards if Plug Power can overcome its hurdles and establish a sustainable path forward in the green hydrogen revolution.
