Plug Power Shares Fall 6.7% Following Analyst Downgrade

Plug Power, Inc. (NASDAQ:PLUG) experienced a significant decline in its stock price, falling by 6.7% on October 9, 2023, following a downgrade from Susquehanna Financial Group. The firm lowered its price target for Plug Power from $3.50 to $2.50, maintaining a neutral rating on the stock. During trading, shares dropped to a low of $2.04 before closing the day at $2.09. The trading volume reached 73,003,020 shares, a 24% decrease from the average volume of 95,894,977 shares.

The recent downgrade follows a series of mixed evaluations from various financial institutions regarding Plug Power. On August 12, BMO Capital Markets adjusted its price objective from $1.10 to $1.00, designating the stock as “underperform.” Conversely, on October 3, HC Wainwright raised its target price from $3.00 to $7.00, giving the company a “buy” rating. Notably, HSBC Global Research upgraded Plug Power to a “strong-buy” rating on October 9, while Jefferies Financial Group increased their price target from $0.90 to $1.60, rating it as a “hold.”

Analyst ratings for Plug Power vary significantly, with one analyst issuing a “strong buy,” four rating it as “buy,” six assigning a “hold,” and six categorizing it as a “sell.” According to data from MarketBeat, Plug Power currently holds a consensus rating of “hold” with an average target price of $2.42.

Institutional Investor Activity

The dynamics of institutional investment in Plug Power have also shifted recently. Notably, Heights Capital Management Inc. acquired a new stake in the company valued at approximately $31.2 million during the first quarter. Two Sigma Investments LP increased its holdings by 292.1% in the third quarter, now owning 10,830,893 shares worth about $25.2 million. Vanguard Group Inc. boosted its stake by 7.6%, holding 109,631,956 shares valued at $255.4 million after an additional purchase of 7,789,039 shares.

The Legal & General Group Plc also expanded its position in Plug Power by 59.9% during the second quarter, acquiring 16,980,865 shares, valued at approximately $25.3 million. Meanwhile, Electron Capital Partners LLC entered the market with a new stake valued at $10.7 million. Currently, institutional investors own 43.48% of the company’s stock.

Financial Overview

Plug Power’s recent financial performance has raised concerns among investors. The company reported earnings on November 10, 2023, revealing a loss of $0.12 per share, slightly better than the consensus estimate of $0.13. Revenue for the quarter totaled $177.06 million, which fell short of analyst expectations of $185.41 million. The firm reported a negative net margin of 292.84% and a troubling return on equity of -90.22%.

As Plug Power looks ahead, it has set guidance for fiscal year 2025, with analysts forecasting an average earnings per share of -1.21. The company operates within the hydrogen and fuel cell technology sector, offering a range of products including the GenDrive fuel cell system, GenSure stationary solutions, and the ProGen fuel cell stack technology.

This recent stock performance and analyst activity underscore the volatile nature of Plug Power’s market presence as it navigates the challenges of the renewable energy sector. Investors will be watching closely as the company continues to evolve and adapt in this competitive landscape.