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On Tuesday, Jefferies analyst Dushyant Ailani revised the price target for Plug Power stock, traded on (NASDAQ:PLUG), to $1.70 from the previous $2.80, while continuing to recommend a Hold rating on the shares. According to InvestingPro data, analyst targets for PLUG range from $1.00 to $5.00, with the stock currently trading at $1.71, showing significant volatility with a beta of 1.98. The adjustment follows the company’s fourth-quarter earnings report and reflects updates to Plug Power’s financial model, which now projects fiscal year 2025 revenue at $771 million and a gross margin (GM) of negative 24%.
The analyst noted that some of the revenue expected in 2025 is due to delayed projects from 2024, particularly in the first quarter and first half of the year. Additionally, Plug Power has announced plans for cost savings between $150 million and $200 million, with an even distribution between operating expenses and cost of goods sold (COGS).
Ailani highlighted the challenges in assessing the true impact of cost-cutting measures, as increased volume growth could potentially offset some of the anticipated savings. The firm’s stance remains cautious due to the various uncertainties surrounding Plug Power’s outlook, leading to the decision to maintain a Hold rating on the stock.
Jefferies’ updated price target reflects a more conservative valuation of Plug Power’s future financial performance, considering both the delayed revenue and the potential difficulty in realizing the full extent of proposed cost savings. Despite the planned cost reductions, the firm advises investors to remain on the sidelines until there is more clarity on the company’s ability to navigate these uncertainties.
In other recent news, Plug Power has faced a series of analyst evaluations following its latest financial results. The company reported a challenging fiscal year 2024, with a significant 30% decline in revenue and a gross margin loss of -99% after writedowns. BMO Capital Markets responded by lowering its price target for Plug Power to $1.40, maintaining an Underperform rating due to the prolonged timeline to profitability. Similarly, Canaccord Genuity adjusted its price target to $1.25, holding a cautious stance with a Hold rating amidst uncertainties in the company’s financial outlook.
Meanwhile, Craig-Hallum decreased its price target to $2.50 but maintained a Buy rating, reflecting optimism in Plug Power’s efforts to refocus on core sectors like material handling and green hydrogen. TD Cowen also upheld a Buy rating with a $4.00 price target, highlighting the company’s strategic initiatives, including Project Quantum Leap, aimed at reducing annual costs by $150 to $200 million. Oppenheimer reiterated a Perform rating, acknowledging the company’s cash management efforts but noting the need for additional capital to sustain operations into 2026.
These developments underscore Plug Power’s ongoing challenges in achieving profitability, as it plans to streamline operations and focus on key growth areas. Investors remain attentive to the company’s progress towards its 2025 profitability goals and its strategic cost reduction measures.
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