From the start of the year through the end of trading last week, Plug Power (NASDAQ: PLUG) stock has vastly underperformed the market. Whereas the S&P 500 rose 7.4% during this time frame, share prices of Plug Power fell about 18%.
However, one Wall Street analyst believes that Plug Power stock is set to reverse this downward trend and head higher. Hiking his price target 33% from $3 to $4, Jordan Levy, an analyst at Truist Financial, thinks Plug Power could soar about 16% from Wednesday’s closing price of $3.43.
Levy predicates the stock’s higher price target on investors’ continuing enthusiasm for the company’s hydrogen production announcement. In late January, Plug Power announced that it had commenced operations at a liquid hydrogen production facility in Georgia — an important step in its pursuit of developing a robust hydrogen production infrastructure. Plug Power is targeting daily hydrogen production of 2,500 tons by 2030.
Investors are missing the mark on Plug Power if they click the buy button
For hydrogen investors who find Levy’s price target encouraging, it’s important to hold off before picking up shares. Levy set the $4 price target right before the company reported fourth-quarter 2023 financial results on Friday morning. While the company grew revenue 27% year over year, Plug Power, unsurprisingly, reported a steep loss of $2.62 per share, representing a steeper loss than the $1.25 per share loss it reported during the same period last year.
It’s unlikely that shares will bounce back anytime soon and rally to Levy’s price target. And even those who believe that they will should look elsewhere. The company’s persisting inability to generate a profit and generate organic cash flow is deeply concerning. Until Plug Power demonstrates the ability to grow profits as well as revenue, it’s best to watch this stock from the sidelines.
Should you invest $1,000 in Plug Power right now?
Before you buy stock in Plug Power, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Plug Power wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.
*Stock Advisor returns as of February 26, 2024
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Truist Financial. The Motley Fool has a disclosure policy.
Plug Power Stock Has 16% Upside, According to 1 Wall Street Analyst was originally published by The Motley Fool
Signup bonus from
