It has been a bountiful 2020 so far for investors of Plug Power (PLUG). Riding the alternative energy trend and boosted by massive earnings beats, the stock has outperformed the market while raking in gains of 318% year-to-date.
Last week, PLUG hosted a Hydrogen Symposium, in which it outlined how it plans to take a major role in the development of the nascent hydrogen economy. Canaccord analyst Jonathan Dorsheimer believes the symposium provided great insight but left investors wanting more.
“While we are pleased with PLUG’s updates and feel like the symposium was well executed, we believe investors had incorrectly priced in a material update in the financials. We see this as potentially short-sighted,” Dorsheimer noted.
However, the analyst also believes the hydrogen economy has “yet to prove its place in the sustainability universe,” arguing the phase of early adoption is characterized by a mix of hard science and “overly optimistic expectations.”
“We have observed this with the solar industry, in the early days of EVs and even now with the battle over the future of EV battery technology. As such, we believe the strategy of vertical integration and scale will be critical for wider adoption,” the analyst opined.
Which stands PLUG in good stead, as this strategy has been taking shape. With the recent acquisitions of hydrogen producer United Hydrogen and PEM (Proton Exchange Membrane) electrolysis specialist Giner ELX, PLUG “is quickly emerging as a leader in H2.”
All in all, Dorsheimer sticks to his Buy rating. However, his $13 price target suggests shares will remain range bound for the foreseeable future. (To watch Dorsheimer’s track record, click here)
There’s widespread support for PLUG amongst Dorsheimer’s colleagues, too. PLUG’s Strong Buy consensus rating is based on 9 Buys and 1 Hold. Hoeever, at $13.08, the average price target implies a modest downside from current levels. (See PLUG stock-price forecast on TipRanks)
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Disclaimer: The opinions expressed in this article are solely those of the featured analyst. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.