There is no global trend more powerful right now than the adoption of renewable energy sources as countries all over the world aim to reduce carbon emissions. As investors, we have all seen the parabolic rise of electric vehicle companies like Tesla (NASDAQ:TSLA), and indeed vehicles and alternative fuel sources are at the top of the global agenda in terms of reducing emissions. Plug Power (NASDAQ:PLUG) is a company that is at the forefront of introducing alternative fuel sources as it focuses on hydrogen fuel cell systems that will eventually replace internal combustion engines. Plug was founded back in 1997 and until recently has primarily been manufacturing hydrogen powered forklifts for use in warehouses. Learn more

Plug’s stock has had a bumpy ride over the past couple of years. Back in January of 2020, the stock was trading as a penny stock, with shares as low as $3.87 per share. In January 2021, Plug peaked alongside most of the renewable energy industry, once President Biden was elected into the oval office. At its apex, Plug traded for a staggering $75.49 per share, but soon the stock price plummeted as fast as it rose. Plug was hit with short reports and an accounting scandal that caused some serious damage to the company’s public image. Currently, Plug trades at just less than $30 per share, and has a market cap of $16.5 billion USD. Here’s how Plug grades out as a long-term investment.

Plug Stock Analysis: Plug certainly has secular tailwinds at its back, as nearly every continent in the world continues to move towards the universal goal of carbon neutrality. Plug Power has signed some monster deals that will see the company graduate from forklifts into the world of clean energy vehicles. It signed a monster $1.5 billion USD deal with SK Group, a major South Korean industrial conglomerate, that will see Plug produce 125kW Progen fuel cell engines specifically made for electric delivery vehicles. The two companies are also joining forces to supply other Asian markets with hydrogen fuel cells, which sees SK Group take a 10% stake in Plug.

Plug has also signed a similar deal with French automaker Renault to provide fuel cell engines for light commercial vehicles. The company is widely considered one of the global leaders in hydrogen fuel cell technology, and it owns over 150 patents in the hydrogen technology field. It has experienced a 300% revenue growth since 2013, and anticipates the hydrogen industry to reach a $10 trillion value by 2050.

The short report from Kerrisdale Capital shouldn’t be ignored, but it was more to do with the circumstance of the rapid, inflated growth of the stock price. The larger issue for Plug is how widely hydrogen fuel cells and vehicles will be adopted. The hydrogen refueling infrastructure is growing at a much slower pace than the electric battery recharging infrastructure. It is believed that eventually, hydrogen vehicles will be able to reach price parity with fully electric vehicles by 2025, and be cheaper by 2030. If this growth continues for the hydrogen fuel cell industry, then Plug has a long runway for success. It’s trading at a discount right now, but Plug needs to prove to the market that it is worthy of a loftier valuation.


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