This explains why there is expected to be a "meaningful margin improvement from Q4 of this year (2021) to Q4 2022." At its Q3 2021 results briefing, PLUG also highlighted that "we plan to have about four of these hydrogen plants basically being commissioned" by end-2022.
#Plug power stock driver
In terms of narrowing operating losses, the key driver is Plug Power's guidance that "Q4 2022 hydrogen costs" are expected to be "over 20% lower than Q4 2021" as indicated in its Q3 2021 shareholder letter. Also, Plug Power has found new market applications for what it refers to as its "ProGen platform of modular fuel cell engines", as per the chart below. Plug Power bought out Applied Cryo Technologies on November 23, 2021, which it describes as a "provider of technology, equipment and services for the transportation, storage and distribution of liquefied hydrogen." PLUG subsequently concluded the acquisition of Frames Group on December 9, 2021, which was called "a leader in turnkey systems integration for the energy sector" in its media release.
#Plug power stock drivers
Inorganic growth and new markets are also key drivers of Plug Power's expected +80% jump in revenue this year. Separately, Plug Power ventured into the electrolyzer business in mid-2020 when it acquired Giner ELX, which it refers to as a company with "one of the most experienced teams in the world in Proton Exchange Membrane (PEM) electrolysis." PLUG is targeting electrolyzer sales in excess of 100MW to support its $150 million electrolyzer revenue guidance. Plug Power indicated at the company's Q3 2021 earnings callthat its expected $925 million (upper end of guidance) revenue for 2022 will be comprised of $600 million from material handling, $150 million in electrolyzer sales, $100 million from M&A, and $75 million generated by new markets.įor its material handling business, PLUG "added five pedestal customers well ahead of target" as per its third-quarter shareholder letter. In my opinion, the market's revenue and EBITDA expectations for Plug Power this year are realistic. Wall Street's consensus 2024 adjusted EBITDA estimate is even higher at $320 million. In the company's most recent Q3 2021 shareholder letter, Plug Power highlighted that it was "raising revenue guidance for 2022 given acquisitions and commercial traction to $900 million-$925 million." The sell-side's consensus 2022 revenue forecast ($899 million) is at the lower end of the company's top-line guidance.Īlthough PLUG did not provide EBITDA guidance for 2022, the company had earlier set a target of achieving positive non-GAAP adjusted EBITDA of $250 million in 2024. The sell-side analysts' financial forecasts are in line with management guidance. Wall Street also forecasts that PLUG's losses at the non-GAAP adjusted EBITDA level will narrow from -$180 million last year to -$17 million in the current year. Market consensus sees Plug Power's top line expanding by +80% YoY from $499 million in fiscal 2021 to $899 million in FY 2022, according to sell-side financial estimates sourced from S&P Capital IQ. Heading into 2022, PLUG stock is expected to deliver higher revenue and narrower losses. This is why I have turned bullish on the name. I see increased revenue and narrower operating losses for PLUG in 2022, and its current valuations are attractive as compared to peers. I focus on Plug Power's outlook this year in this latest article. My prior initiation article for Plug Power was published on September 30, 2021. I raise my investment rating for Plug Power Inc.'s ( PLUG) shares from a Hold to a Buy. Onurdongel/iStock via Getty Images Elevator Pitch
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