Is Plug Power stock a buy? (January, 2025)

“A major catalyst”. That’s how Roth MKM analyst Craig Irwin describes the latest development at Plug Power (Plug Power Stock Quote, Chart, News, Analysts, Financials NASDAQ:PLUG).

On January 16, PLUG announced that it had closed a loan guarantee worth $1.66-billion with the U.S. Department of Energy’s Loan Programs Office.

“Finalizing this loan guarantee with the Department of Energy represents a significant step in the expansion of our domestic manufacturing and hydrogen production capabilities, which create many high-quality jobs throughout the U.S.,” CEO Andy Marsh said. “In addition to reducing carbon emissions and enhancing the resilience of the U.S. energy grid, we believe the hydrogen economy aligns closely with national security interests, ensuring that the U.S. remains at the forefront of energy technology development and deployment on a global scale.”

The analyst summarized the event.

“Plug achieved a key milestone on the successful execution of a $1.67bn DOE loan guarantee supporting the buildout of six green hydrogen plants, lifting a major overhang on the stock,” he wrote. “In 4Q24 we expect roughly $150m in positive deltas to cash use on the liquidation of finished goods inventory and monetization of Federal credits. We expect price increases, internal production of green hydrogen, cost streamlining, and lower working capital to contribute materially to lower cash needs in 2025.”

In a research update to clients January 17, Irwin maintained his “Buy” rating and price target of $5.00 on PLUG.

The analyst thinks PLUG will post and EBITDA loss of $719.7-million on revenue of $700.0-million. In fiscal 2025, he expects and EBITDA loss of $211.0-million on revenue of $900.0-million.

“We reiterate our $5.00 price target using a 5x multiple on our ’25 revenue estimate of $900m. We see a 5x P/Sales multiple as fair given the successful generation of Green Hydrogen PTC in Georgia and improving visibility on 2H25 gross margin improvement,” Irwin concluded.