Penny stock Plug Power (PLUG) has been unsuccessful to keep up positive market sentiment but can it continue?
Though the hydrogen fuel cell technology might be considered promising, this company has had an elongated and vain run as an energy penny stock. However, the company has been able to generate a fair amount of revenue over the years. Scaling up its revenues, there is an anticipation that Plug Power (PLUG Stock Report – Free) may turn into a viable business. There is a ray of hope which might just shake off negative sentiment and hydrogen fuel cell penny stocks in general.
As an investor of the PLUG stock, one can find any of the three circumstances as time goes on:
- Fizzled out
- On top of the world
- More of the same.
A deeper look into each of these possibilities is quintessential for any current investor or any prospective one.
Digging Deeper Into Plug Power (PLUG)
Fuel cell technology is a clean technology generating combustion free electrical power. It hasn’t been able to compete with its arched rival – the rechargeable electric battery. Even so, a number of electric vehicle stocks like the newest penny stock NIO have had a hard go lately. While both segments were originally touted as green energy, in recent years batteries have been handily winning that battle. A mere look at the data is enough to highlight the edge of the rechargeable batteries over the fuel cell technology.
On one hand, the number of fuel-cell vehicles on the road in 2017 was 6500. There were about 3.1 million electric vehicles on the road worldwide in the same year. Fuel Cells have been relegated mostly to powering material-handling vehicles and some airport vehicles. The finance of the Company is also not in great shape.
Despite the consistent scaling revenue, Plug Power has never recorded an annual profit. Thus, if the company couldn’t manage to turn the table of loss into profit. The implementation of fuel cell technology remains elusive.
However, there are some signs that may not happen. Tracing the records of the Company and going by its history, the Company has been successful in growing its revenue time and again. The rosy financial projections of the company and CEO Andy Marsh’s claims that Plug would turn a profit in 2019 were met with some skepticism by investors.
Positive Or Negative Outlook For This Penny Stock?
However, Marsh’s claim that the company would be announcing global partners is not completely futile. On May 28, Plug announced it was partnering with electric-vehicle manufacturer StreetScooter. The deal provides 100 hydrogen fuel cell-powered delivery trucks to logistics heavyweight Deutsche Post DHL. Delivery of the trucks is set to begin in 2020.
Later on June 11th, the company announced the acquisition of Canadian fuel cell specialist EnergyOr. This supplements ultralightweight fuel cells to its portfolio. These developments have given investors hope that Plug still has opportunities to expand beyond its core material-handling market.
Hydrogen is still an issue for Plug Power. Though 100 delivery vehicles is a good start it would not keep the company going for long. Though the advantages of hydrogen over batteries could not be ruled out, battery-powered vehicles are making big splashes. The company still vouches for its fuel cells. Its website says that its fuel cells are less subject to degradation, take up less room, and cost less to operate. Could Plug shares get a big boost if hydrogen cell vehicles get popular?
Thus it is extremely difficult to deduce where the company would be in the next five years. Despite the fact that there are some potential paths to prosper, none of them seems to be a proven winner. Thus, the possibility of Plug becoming a game changer is still up in the air. From an investor’s standpoint, only those with an extremely high tolerance for risks may put this as a penny stock to watch.