Plug Power Inc (NASDAQ:PLUG) stock has declined over 40% since April 14, 2014. Short interest in the stock also rose 3.7% in September. But the company is poised to triple its FY2014 revenue to $75 million from last year’s $26 million. According to Albany Business Review, the company shipped a whopping 857 units of GenDrive during the third quarter, up from 155 units in the same period a year ago.
Plug Power’s deal with M&T Bank to attract more customers
Plug Power is increasing its sales by selling more fuel cells, installing more refueling stations and growing its service business. Last month, the company inked a deal with M&T Bank to offer financing service to first-time buyers. It will offer financing for fuel cells, refueling stations and service agreements as part of an all-in-one package called GenKey. Plug Power CEO Andy Marsh says many of the Fortune 500 companies also look for financing options. The deal will likely attract more new customers.
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The Latham, New York-based company says major automakers such as Volkswagen, Mercedes-Benz, BMW and Honda all use its fuel cell forklifts because they offer lower operating costs and superior benefits. Plug Power also ships fuel cells to Wal-Mart, Kroger, CVS Pharmacy, and is expected to start deliveries to FedEx by the year end.
What will drive Plug Power’s revenue growth?
Analysts polled by Thomson Reuters expect Plug Power to generate $75.9 million in revenue in FY2014. The company reported $17.3 million in second-quarter revenues. Andy Marsh said the company can earn $8-$12 million over five years for every customer that buys fuel cells for 250 forklifts, a service agreement and a refueling station.
That’s almost double the amount Plug Power will earn by only offering fuel cells. Its fuel cells have a clear advantage over battery-powered equipment because they take much less time to refuel, thus reducing the down time. Andy Marsh says the revenue growth is driven by the use of its technology in more equipment such as airport transportation vehicles and refrigerated trucks.
Plug Power shares fell 2.11% to $4.35 at 1:05 PM EDT on Monday.