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On Wednesday, Canaccord Genuity revised its price target for Plug Power (NASDAQ:PLUG) stock, trading on the NASDAQ, lowering it to $1.25 from the previous target of $2.00. The firm has chosen to maintain a Hold rating on the shares. The stock, currently trading at $1.62 with a market capitalization of $1.5 billion, has seen its value decline by over 55% in the past year, according to InvestingPro data.
The adjustment by Canaccord Genuity comes amidst Plug Power’s sharpened focus on profitability and cash flow. George Giankarikas, an analyst at the firm, expressed a cautious optimism, noting the company’s commitment to improving its financials. This focus is crucial given the company’s concerning gross margin of -91.66% and significant revenue decline of 29.45% over the last twelve months. He emphasized the need for substantial evidence of progress, clearer regulatory guidelines, and updates on potential capital injections before considering a rating change.
Canaccord Genuity’s decision to reduce the price target is based on alterations to their financial model. While acknowledging the negative implications suggested by the new target, Giankarikas stated that the Hold rating remains appropriate due to the current uncertainties facing the company. InvestingPro analysis indicates the stock is currently undervalued, though investors should note that 13 key risk factors have been identified. Subscribers can access the full analysis and detailed Pro Research Report, which provides comprehensive insights into the company’s financial health and future prospects.
The new price target of $1.25 reflects a more conservative valuation of Plug Power’s stock, factoring in the challenges the company must overcome. Despite the lowered target, the Hold rating indicates that Canaccord Genuity advises investors to maintain their positions in the stock for the time being, pending further developments that could impact the company’s outlook.
Plug Power has not yet provided any additional public statements or information following the announcement from Canaccord Genuity. Investors and market watchers will likely be monitoring the company closely for any signs of the "stout proof points" that the analyst has indicated are necessary for a reassessment of the stock’s potential.
In other recent news, Plug Power has reported its fourth-quarter 2024 earnings, revealing a significant shortfall in both earnings and revenue. The company posted an earnings per share (EPS) of -$0.2385, missing analyst forecasts of -$0.2249, and recorded revenue of $191 million, falling short of the expected $254.7 million. Plug Power’s full-year revenue for 2024 was $629 million, indicating ongoing challenges in meeting market expectations. BMO Capital Markets has responded to these financial results by reducing its price target for Plug Power from $1.60 to $1.40 and maintaining an Underperform rating, citing a 30% year-over-year revenue decline and substantial gross margin losses.
Additionally, Oppenheimer has maintained a Perform rating on Plug Power, highlighting the company’s efforts in cash management and potential savings in 2025, despite ongoing revenue and margin challenges. The firm notes that Plug Power is working to reduce its inventory levels and may need additional capital to sustain operations into 2026. Plug Power has announced plans to cut costs by $150-200 million, evenly split between cost of goods sold and operational expenses, as part of a strategic shift to improve its financial health. The company aims to achieve a positive gross margin by the fourth quarter of 2025, with new initiatives including a joint venture hydrogen facility in Louisiana set to launch in 2025.
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