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Why Plug Power Stock Jumped Again Today


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Shares of hydrogen fuel cell company Plug Power (NASDAQ: PLUG) continued to soar again today. Over the past five trading days, the stock has jumped by more than 25%. There have been several catalysts for the recent surge in the stock. That includes today’s jump of 17.8% as of 11:50 a.m. ET.

Making green hydrogen

Plug Power stock had plunged since it implied bankruptcy was a real possibility when it issued a “going concern” warning with its third-quarter report in November. But shares rebounded after Plug provided a business update last week. In that update, management announced that it has begun operating its new green hydrogen plant in Georgia. That is now the largest liquid green hydrogen plant in the U.S.

That progress led Roth MKM analyst Craig Irwin to upgrade Plug Power stock today and double that firm’s price target to $9 per share. That stock price target helps explain today’s move, as it would represent a gain of more than 140% from yesterday’s closing price.

Digging out of a financial hole

Plug has been burning cash as delays have affected its hydrogen production plans, causing it to purchase hydrogen on the open market. But the new Georgia plant could help cut costs and add to revenue generation.

One large U.S. steelmaker highlighted a use case for that hydrogen yesterday when Cleveland-Cliffs discussed its use of hydrogen in steelmaking. Cliffs CEO Lourenco Goncalves stated in that company’s fourth-quarter conference call that “hydrogen is the real game-changing event in ironmaking and steelmaking.” He also noted, “The United States is closer than anyone else to becoming the first country in the world to have abundant and competitively priced green hydrogen available to support a true green industrial revolution.”

Plug Power’s new facility should be a beneficiary of that demand. That helps explain the renewed optimism in Plug Power and its stock today. The company still has a long way to go before it will realize profits from its hydrogen production plans, however. Investors should be aware of the risks involved even as the new production facility ramps up.

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Howard Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Why Plug Power Stock Jumped Again Today was originally published by The Motley Fool

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