Plug Power's Long-Term Visibility Worries This Analyst - Forecast Halved

Truist Securities analyst Jordan Levy reiterated the Hold rating on Plug Power, Inc. PLUG, lowering the forecast to $3 from $6.

Per the analyst, PLUG’s stock has seen a rocky 2023, with shares down 64% vs. S&P 500 +24%, owing to numerous delays to the company’s hydrogen production facilities.

The company has also been hit by 2Q issues with electrolyzer production rollout that have been exacerbated by a continuing significant outspend, causing the company to include going concern language in its most recent 10-Q filing.

Looking to the fourth quarter, the analyst sees the onus on management to announce a new financing deal(s) that will stabilize the company’s balance sheet, including potential DoE loans, corporate debt, or project financing/plant equity agreements.

Levy forecasts fourth quarter EBITDA of ($130 million) vs Street ($122 million), anticipates gross margins moving back up from 3Q lows but remaining in the negative double digits.

Past 4Q earnings and imminently needed financing, investors should be looking for finalized PTC guidance to determine the LT domestic viability of Plug’s green hydrogen business, per the analyst.

However, the analyst forecasts a step up in electrolyzer sales during 2024, as well as a recovery in the company’s GenDrive business following a projected YoY decline in 2023, but are still well below the Street for FY24E EBITDA, ($284 million) vs ($209 million).

The analyst reduced FY25E revenues to $1.8 billion from $2.3 billion prior & Street $2.5 billion on long-term visibility concerns.

Price Action: PLUG shares are trading higher by 26.2% to $3.58 on the last check Tuesday.