Here's Why Penny Stock Plug Power (PLUG) Spiked Today
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The deal is expected to ensure a stable and reliable hydrogen supply for Plug's expanding applications business that too at lower costs. Overall, the deal supports Plug's growing base of over 275 customer sites and aligns with its cost-cutting initiative, Project Quantum Leap.
CEO Andy Marsh called the agreement 'a win for Plug, our customers, our suppliers, and our margin profile.'
Interestingly, Plug disclosed plans to launch over 40 new hydrogen sites in 2025. Further, it will expand production capacity at plants in Georgia, Tennessee, and Louisiana, which currently produce 40 tons/day of liquid hydrogen.
Legislation Sparks Optimism
This extension comes on the heels of recent U.S. energy and tax legislation aimed at growing the clean hydrogen industry. PLUG expects the new policies to boost market growth going forward.
Importantly, JPMorgan analyst Bill Peterson sees the new bill as a good sign for Plug Power's future, especially in boosting demand for clean hydrogen. However, the analyst noted the real impact will depend on whether Plug can improve profit margins and slow down its spending in the near term.
Is PLUG a Good Stock to Buy?
Turning to Wall Street, PLUG stock has a Hold consensus rating based on four Buys, 11 Holds, and four Sells assigned in the last three months. At $1.34, the average Plug Power stock price target implies a 24.72% downside potential.
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The consensus estimate for its bottom line is pegged at a loss of 59 cents per share. Image Source: Zacks Investment Research The Zacks Consensus Estimate for FCEL's fiscal 2025 (ending October 2025) sales is approximately $144.6 million, indicating growth of 28.9% year over year. Estimates for its bottom line are pegged at a loss of $6.22 per share. Image Source: Zacks Investment Research Price Performance and Valuation of PLUG & FCEL In the past three months, Plug Power's shares have surged 91.8%, while FuelCell Energy stock has gained 37.4%. Image Source: Zacks Investment Research From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 4.13X. In comparison, FuelCell Energy's forward earnings multiple currently sits at a negative 1.06X. Conclusion Plug Power and FuelCell Energy have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. 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