The slump in the hydrogen space, marked by a 20% year-to-date slide in the Global X Hydrogen ETF (NASDAQ:HYDR), underscores a market teeming with undervalued hydrogen stocks. The market correction presents an excellent opportunity for investors bullish on undervalued hydrogen stocks to capitalize on their potential.
Transitioning to a broader energy narrative, the surge toward sustainable solutions bolsters the attractiveness of hydrogen stocks. Despite facing scalability and challenges related to cost, these obstacles are overshadowed by the sector’s massive growth trajectory. It ushers in a new era of energy efficiency and sustainability, promising to transform our energy landscape and drive significant economic growth.
Looking ahead, projections from Markets and Markets suggest a leap to approximately $410.6 billion by 2030, up from $242.7 billion in 2023. The surge is indicative of the rising demand for sustainable solutions, highlighting three undervalued hydrogen stocks as attractive long-term picks in the burgeoning green energy market.
Undervalued Hydrogen Stocks: New Fortress Energy (NFE)
New Fortress Energy (NASDAQ:NFE) is emerging as a key player in the clean energy transition, demonstrating a clear long-term vision for expansion. With the go-ahead to transport liquefied natural gas (LNG) from Mexico to the United States, NFE is tapping into massive market opportunity, indicative of its proactive expansionary approach. Moreover, the acquisition of the PortoCem Power Purchase Agreement in Brazil bolsters its strategy for asset optimization and cements its position in the renewable energy sector.
Financially, NFE continues to impress, outperforming expectations, with fourth-quarter (Q4) non-GAAP earnings-per-share (EPS) hitting $1.01, surpassing forecasts by 19 cents. Moreover, its year-over-year (YOY) sales increase of 38% to $758.4 million points to robust demand for NFE’s offerings.
Additionally, the forward non-GAAP price-to-earnings (P/E) ratio for NFE sits attractively at 7.86, markedly 29% under the sector’s median of 11.22. Consequently, analysts at TipRanks have assigned NFE a Moderate Buy rating, with an attractive upside potential of 24%.
Energy Vault Holdings (NRGV)
Energy Vault Holdings (NYSE:NRGV) is capturing the spotlight with innovative energy storage solutions. NRGV recently unveiled its utility-scale green hydrogen plus battery energy storage system (BH-ESS) project in Calistoga, Northern California. Slated for commercial operations by the second quarter (Q2) this year, backed by a 10.5-year tolling agreement, the project highlights the company’s enviable position in long-duration energy storage innovation. Additionally, NRGV has strategic expansions in the United States, Southern Africa and China, where its projects have surpassed 3.7 GWh of EVx gravity energy systems.
Moreover, with a forward price-to-sales ratio of 0..43, 71% below the sector median, NRGV stock remains undervalued. Wall Street analysts echo this sentiment, assigning NRGV a Buy rating with a jaw-dropping 222% upside potential. That consensus accentuates the widespread optimism over NRGV’s innovative strides and long-term positioning.
Chart Industries (GTLS)
Chart Industries (NYSE:GTLS) focuses on hydrogen technologies for a cleaner world, earning it a spot among America’s Most Responsible Companies 2024 by Newsweek. The recognition affirms GTLS’s unwavering commitment to advancing sustainability efforts.
That commitment seamlessly aligns with its role in the groundbreaking hydrogen-hybrid CCRV research vessel, where GTLS and Ballard Power Systems (NASDAQ:BLDP), are supplying vital components for the propulsion system. GTLS and Ballard are playing a key role in advancing marine engineering towards greener pastures.
Despite revenue expectations falling short in Q4 2023, GTLS demonstrated impressive growth, with profits per share rising from 37 cents to 88 cents. Additionally, adjusted EPS of $2.25 exceeded forecasts by 11 cents, showcasing the firm’s resilience and financial strength.
Furthermore, GTLS’ attractive valuation metrics, including a forward non-GAAP P/E ratio of 13.31, 29% below the sector median, position it as an appealing investment opportunity. With TipRanks analysts assigning GTLS a Moderate Buy rating and predicting a stellar 31% upside potential, investor optimism surrounding its future remains high.
On the date of publication, Muslim Farooque 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.
