Plug Power stock is a buy, Roth says

With a major milestone cleared, Roth MKM analyst Andrew Scutt sees good things ahead for Plug Power (Plug Power Stock Quote, Chart, News, Analysts, Financials NASDAQ:PLUG).

The analyst, in a December 5 update to clients, noted that The Department of Energy published the National Environmental Policy Act for PLUG’s Young County, Texas green hydrogen project, clearing the way for a $1.7-billion loan. The analyst says he expects the process will take another thirty days to complete.

With the news, Scutt reiterated his “Buy” rating and price target of $5.00 on PLUG.

“We reiterate our $5.00 target using a 5x multiple on our ’25 revenue estimate of $900m,” he wrote. “We see the 5x multiple as fair given the successful generation of Green Hydrogen PTC in Georgia and improving visibility on 2H25 gross margin improvement. Shares of PLUG could see increased volatility due to the high valuation on 2025 estimates, where individual company and industry catalysts, and expectations around catalysts, can both drive material implied changes to long-term hydrogen economy scenarios. Factors that may impede shares of PLUG from reaching our price target include: (1) lower than expected GenDrive shipments; (2) increasing competition in the fuel cell material handling market; (3) material changes in production costs; and (4) a significant change in relationships with customers or suppliers.”

Scutt thinks PLUG will post an EBITDA loss of $719.7-million on revenue of $700-million in fiscal 2024. He expects those numbers will improve to an EBITDA loss of $211.0-million on a topline of $900.0-million in fiscal 2025.