SoFi CEO enters prepaid forward contract on 1.5 million shares
On Wednesday, Craig-Hallum analyst Eric A. Stine adjusted the price target for Plug Power (NASDAQ:PLUG) shares to $2.50, a decrease from the previous target of $3.00. Despite the reduction, Stine maintained a Buy rating on the stock. Currently trading at $1.60 with a market cap of $1.47 billion, PLUG shares have declined over 55% in the past year. Stine’s comments followed Plug Power’s fourth-quarter results, which fell short of expectations. The company provided guidance for first-quarter 2025 revenues but did not offer full-year guidance for 2025.
Stine noted that Plug Power has been expanding its business through acquisitions and substantial investments over the past several years. The company has aimed to leverage its position as a pioneer and key contributor to the hydrogen economy’s growth. According to InvestingPro data, the company’s financial health score of 1.42 is rated as WEAK, with revenue declining 29.45% in the last twelve months. The analyst pointed out that the industry’s development has been slower than expected, and the overall market environment, particularly in the United States, presents uncertainties.
In response to these challenges, Plug Power is refocusing its business on its core sectors: material handling, green hydrogen, and electrolyzers. These areas have historically been foundational for the company and offer immediate benefits. InvestingPro analysis reveals concerning gross margins of -91.66% and rapid cash burn, making these cost-cutting measures crucial. Additionally, Plug Power is implementing a new series of cost optimization efforts anticipated to reduce annual expenses by $150 million to $200 million.
Stine believes that these measures are appropriate given the company’s balance sheet and that further steps may be necessary. He also emphasized that for Plug Power to achieve meaningful share upside, the company must demonstrate progress toward positive gross margin and EBITDA. The maintenance of the Buy rating reflects Stine’s view that as Plug Power works on these financial goals, its shares have potential for growth. For deeper insights into PLUG’s financial health and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro, along with 13 additional ProTips and extensive financial metrics.
In other recent news, Plug Power has reported its fourth-quarter 2024 earnings, which fell short of expectations. The company posted revenue of $191 million, significantly below the forecasted $254.7 million, and an earnings per share (EPS) of -$0.2385, missing the expected -$0.2249. This performance has been a point of concern for investors, as Plug Power also experienced substantial non-cash charges of $971 million due to asset impairments. Amid these challenges, BMO Capital Markets has lowered its price target for Plug Power to $1.40, maintaining an Underperform rating, following a difficult fiscal year 2024 marked by a 30% revenue decline and a gross margin loss of -99% after writedowns.
Meanwhile, Canaccord Genuity also revised its price target for Plug Power, reducing it to $1.25 while retaining a Hold rating. The firm expressed cautious optimism but emphasized the need for more evidence of progress before considering a rating change. Oppenheimer has maintained a Perform rating, acknowledging Plug Power’s ongoing challenges with revenue and margins but recognizing potential savings in 2025. TD Cowen, on the other hand, reiterated a Buy rating with a $4.00 price target, expressing confidence in Plug Power’s strategic initiatives aimed at achieving profitability by the end of 2025.
Plug Power’s strategic focus includes cost-cutting measures, such as Project Quantum Leap, which aims to save $150 to $200 million annually. The company is also planning to increase production capabilities with new facilities in Louisiana and Texas, expected to come online in 2025 and 2026, respectively. As the company navigates these developments, investors will be closely monitoring Plug Power’s progress towards its financial targets and strategic goals.
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