Plug Power stock holds Buy rating and $4 target from TD Cowen

On Wednesday, TD Cowen maintained a positive outlook on Plug Power stock (NASDAQ:PLUG), reiterating a Buy rating and a $4.00 price target, despite the stock’s significant 55% decline over the past year. Currently trading at $1.63, the company faces an uphill battle, with analyst targets ranging from $1 to $5. According to InvestingPro analysis, the stock appears undervalued based on its Fair Value model. The company is focusing its efforts on material handling, electrolyzers, and fuel production to achieve a positive gross margin run rate in the fourth quarter of 2025.

Osborne’s commentary sheds light on Plug Power’s Project Quantum Leap, an initiative designed to reduce annual costs by $150 to $200 million. The cost-cutting measures are part of the company’s broader strategy to streamline its operations and enhance financial performance.

The analyst also noted the anticipated production increases at Plug Power’s facilities, with the Louisiana plant expected to come online in the second quarter of 2025, and another plant in Texas slated to start operations towards the end of 2026. Osborne emphasized that as production ramps up, it will be crucial for Plug Power to cultivate demand to match the increased supply capabilities.

Plug Power’s strategic shift towards core areas of material handling, electrolyzers, and fuel production, combined with its cost reduction efforts, are central to the company’s path to profitability. The firm’s analyst expressed confidence in Plug Power’s targets and its ability to execute its business plan effectively over the next few years.

Investors are keeping a close eye on Plug Power’s progress as it advances towards its 2025 profitability goals. The company’s focus on key growth areas and cost optimization initiatives, such as Project Quantum Leap, are expected to play a significant role in its journey to achieve a positive gross margin run rate by the fourth quarter of 2025. InvestingPro subscribers have access to 13 additional ProTips and comprehensive analysis through the Pro Research Report, offering deeper insights into Plug Power’s financial health and growth prospects.

In other recent news, Plug Power Inc. reported its fourth-quarter 2024 earnings, which revealed a greater-than-expected loss and lower-than-anticipated revenue. The company posted an earnings per share (EPS) of -$0.2385, missing the forecasted -$0.2249, while revenue for the quarter stood at $191 million, significantly below the expected $254.7 million. Additionally, Plug Power faced a challenging fiscal year 2024, with a notable 30% year-over-year decline in revenues and a gross margin loss of -99% after writedowns. In response, the company announced plans to reduce costs by $150-200 million, focusing on improved cost management.

BMO Capital Markets recently adjusted its outlook on Plug Power, reducing the price target from $1.60 to $1.40, maintaining an Underperform rating. Meanwhile, Canaccord Genuity also revised its price target for Plug Power, lowering it to $1.25 from $2.00, but maintained a Hold rating. Both firms emphasize the ongoing challenges Plug Power faces, including the need for a strategic shift and the pursuit of profitability.

Oppenheimer reiterated its Perform rating on Plug Power, acknowledging the company’s efforts in cash management and potential savings in 2025. However, the firm highlighted the need for additional capital to sustain operations into 2026. These developments indicate that analysts remain cautious, adopting a wait-and-see approach for Plug Power to demonstrate improved financial performance.

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