Plug Power Inc (NASDAQ:PLUG) has been one of the most volatile stocks over the past few months. It has been called a “penny stock” by Citron Research. And recently, Global Equities Research analyst Trip Chowdhry said that Plug Power and its fuel cell technology aren’t the right fit for the car market. Many consider it a speculative play which has little potential to turn profitable. But Plug Power Inc (NASDAQ:PLUG)’s long-term future may not be as bad as some predict. The Latham, New York-based company’s foray into the new markets, increased revenue stream, and the recent stock offering could work together to lay a solid foundation for Plug Power’s long-term future.
Plug Power has immense potential in Asia
Though the fuel cell technology has received lukewarm response in the U.S., Asian nations have been more receptive. Japan and China both have pledged funds to boost R&D in the hydrogen energy sector or building more fuel stations. Moreover, Japanese companies have joined hands to explore the hydrogen fueling technology. Plug Power Inc (NASDAQ:PLUG)’s deal with Hyundai Hysco to produce and sell fuel cells in Asia represents a huge growth potential.
Dan Loeb's Third Point returned 11% in its flagship Offshore Fund and 13.2% in its Ultra Fund for the first quarter. For April, the Offshore Fund was up 1.7%, while the Ultra Fund gained 2.3%. The S&P 500 was up 6.2% for the first quarter, while the MSCI World Index gained 5%. Q1 2021 hedge Read More
Besides entering new geographies, Plug Power Inc (NASDAQ:PLUG) is expanding its own technology. It has acquired the fuel stack provider ReliOn Inc for $4 million to bring the entire fuel cell process in-house. That will also reduce costs and improve margins. Plug’s GenKey technology provides and seamless and faster transition from old energy sources to hydrogen fuel cells. Companies won’t have to worry about anything, and they don’t have to pay any extra fee for the shift.
Plug Power goes beyond powering forklifts with FedEx deal
Recently, Plug Power Inc (NASDAQ:PLUG) signed a deal with FedEx Corporation (NYSE:FDX) to provide hydrogen fuel cells for 20 trucks. It may turn into a long-term agreement profitable for both parties, says Nick Okon of The Motley Fool. With this deal, the company is exploring different applications for its fuel cell technology. The company recently raised $116 million in a secondary offering. There are speculations that the funds can be used for strategic acquisitions or to expand its presence in more geographies.
Plug Power Inc (NASDAQ:PLUG) already has about $80 million in bookings. So, it’s in a position to surpass its goal of $150 million in sales orders through 2014. The company is expected to become profitable by the fourth quarter of this year.
Plug Power Inc (NASDAQ:PLUG) shares were down 1.77% to $3.88 at 10:22 AM EDT on Thursday.