Investors should keep an eye on Plug Power (PLUG).
After a rough pullback in the latter part of 2021, the hydrogen stock is attempting to push higher. In fact, investors may want to use weakness as a buy opportunity.
For one, the hydrogen story is heating up. Goldman Sachs called hydrogen a “once in a lifetime opportunity,” saying the market could be worth up to $11.7 trillion in over the next 30 years. Even Bank of America says the hydrogen market could be worth $11 trillion by 2050.
Two, “Hydrogen would be necessary for the world’s largest emitters – the U.S., China, and Europe – to achieve net-zero climate targets by 2050 – 2060 by decarbonizing hard to abate industries,” says Energy Global. Even the International Energy Agency says the world still needs an investment of $1.2 trillion by 2030 to meet global net zero emission goals.
Three, Plug Power just disclosed an agreement with Walmart (WMT) to deliver up to 20 tons per day of liquid green hydrogen, according to MarketWatch.com, and will be used to power material handling lift trucks across Walmart’s U.S. distribution and fulfillment centers.
With that, as reported by Barron’s: “’Walmart is now one of Plug’s first green hydrogen supply customers, representing solid validation for Plug’s investments and strategy to expand its green hydrogen ecosystem,’ wrote B. Riley Securities analyst Christopher Souther, who rated the stock a Buy with a price target of $31, in a research note Wednesday. ‘We think deals like this can be key drivers of the margin improvement that management has been referencing.’”
Even better, the company is growing.
In its fourth quarter, the company saw revenue of $162 million, which was the highest quarterly revenue ever booked by Plug Power. For full-year 2021, it saw revenue of $502 million. And then it reaffirmed its 2022 revenue goal of $900 million to $925 million, as well as 2025 goals for $3 billion in revenue, and 17% operating income margins.
Yet, despite all of that news, PLUG is trades at just $27.06. Moving forward with all of those positive catalysts, we’d like to see the stock challenge $46 again, long-term.
