Hydrogen fuel cell technology provider Plug Power (NASDAQ:PLUG) stock has gotten scorched trading down (-44%) for the year. The leading turnkey comprehensive hydrogen fuel cell (HFC) solutions provider’s shares rode the clean energy and ESG hype reaching a high of $75.49 in January 2021 before plunging as low as $12.70 in May 2022.
Rising energy costs have brought more attention to clean and renewable energy options. On May 17, Plug Power announced it received a 1 GW contract with H2 Energy Europe for a hydrogen production complex in Denmark, which is planned to become the world’s largest capacity electrolyzer installation.
The Company has plans in place to ultimately lower its service costs by 45% driven by the deployment of its green hydrogen network.
Prudent investors looking for exposure in the clean hydrogen fuel cell segment can watch for opportunistic pullbacks in shares of Plug Power.
Fiscal Q1 2022 Earnings Release
On May 9, 2022, Plug Power released its fiscal Q1 2022 results for the quarter ending in March 2022. The Company reported an earnings per share (EPS) loss of ($0.27) excluding non-recurring items, missing consensus analyst estimates for a loss of (-$0.16), by (-$0.11).
Revenues grew 95.7% year-over-year (YoY) to $140.08 million missing the $143.99 million consensus analyst estimates.
Conference Call Takeaways
Plug Power CEO Andrew March noted that macroeconomic conditions are challenging stemming from inflationary pressures and supply chain disruptions. He noted that Plug’s future is not based on the present economy, but on the future. He boasted of 80% annual growth expected in a $10 trillion opportunity in green energy.
The Company is committed to booking 1 GW in electrolyzers this year. The performance is scalable to meet and exceed the goal. GenDrive product has a greater than 30% gross margin. The cost of new products will continue to fall as the Company experiences the traditional 25% learning curve for electrolyzers and fuel cells.
Services and learnings are being implemented to cut service costs by 45%, after the deployment of its green hydrogen network of which 70 tons will be ready by end of the year. Costs will be only a third of what they are today. The Company has an M.O.U. with Olin (NYSE:OLN) to take away some of its byproduct hydrogens.
CEO March believes this relationship will be a critical element in building out its hydrogen network across the U.S. Olin Corporation has a waste stream of more than 350 tons of hydrogen per day. The cost is equivalent to under $0.02 a kilowatt-hour.
The Company aspires to generate $3 billion in revenues by 2025 with 20% EBITDA and 17% operating income. He concluded,
“This is the equation for success. We're building the category king, with clear strategic and tactical plans, and great employees that are unmatched in the industry. I've never been more positive about the fit between our strategic and tactical plans as I feel today.”
PLUG Opportunistic Pullback Levels
Using the rifle charts on weekly and daily time frames provides a precise view of the landscape for PLUG stock. The weekly rifle chart put in a near-term bottom near the $12.67 Fibonacci (fib) level. The weekly rifle chart downtrend has a falling 5-period moving average (MA) resistance at $16.88 as it nears the weekly 200-period MA support at $15.40 followed by the falling 15-period MA at $21.91.
The weekly lower Bollinger® Bands (BBs) sit at $11.78. The weekly stochastic is stalling at the 20-band. The weekly market structure low (MSL) buy triggers a breakout over the $17.20.
The daily rifle chart uptrend is starting to break down as the daily 5-period MA starts to fall towards the 15-period MA at $17.44. The daily lower BBs sits at $13.48 as the stochastic formed a mini inverse pup falling under the 80-band. The daily upper BBs sits at $20.53 with the 50-period MA falling at $20.95.
Prudent speculators can watch for opportunistic pullback levels at the $15.50, $14.25, $12.67 fib, $12.00, $10.89, $10.06 fib, $9.43, and the $8.03 price level. Upside trajectories range from the $20.17 fib level up to the $25.59 fib level.