Shares in hydrogen supplier Plug Power (NASDAQ:PLUG) climbed yesterday after the company got a conditional commitment loan guarantee of $1.66 billion. Today, the firm also reported that it has a power system for Class 6 trucks.
PLUG stock rose by around 20% on May 14 and another 8% overnight, opening today at $3.73 per share. Now, though, shares are down about 5% while Plug’s market capitalization sits at roughly $2.4 billion.
Plug Power’s short interest as a percentage of float is currently 28.07%, according to Fintel. That’s a higher short interest than GameStop (NYSE:GME).
PLUG Stock: Plugging Back In
PLUG stock is down more than 25% in 2024 and about 58% over the last year. This price action has come as Plug has struggled to sell its green hydrogen. Revenue fell and losses increased during the first quarter.
Shares didn’t fall far after earnings, however. CEO Andy Marsh recently gave a bullish forecast on a company conference call.
Still, some analysts like BMO Capital and Piper Sandler have turned negative on shares. Plug Power briefly had a “going concern” warning, which was rescinded in March.
The new government loan had already been anticipated, but the company called it a “milestone” nonetheless. The money will help ” finance the development, construction, and ownership of up to six green hydrogen production facilities.”
Meanwhile, Plug’s Class 6 truck integration uses a Plug Power fuel cell and “electric propulsion system” to give the vehicles a range of up to 500 miles. Plug Power said such trucks won’t require a commercial license to drive. Initial pilot road operations will begin this summer.
Sentiment on Plug Power remains bullish on Stocktwits and the high short interest should help. One analyst recently estimated the fair value of PLUG stock at $7.62 per share, based on a discounted cash flow model. The company has 23 analysts with coverage on TipRanks with eight buys, 11 holds and four sell ratings.
What Happens Next?
My problem with Plug Power was noted by Morgan Stanley in its downgrade last year. “Green” hydrogen is still hydrogen, just like “blue” and “brown” hydrogen produced from natural gas and “white” hydrogen found underground. It just costs more.
On the date of publication, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
