Plug Power stock climbs before earnings as options traders brace for volatility
AI Sentiment: 68/100 Bullish
This score is generated through AI-driven analysis of the article's content.
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Buy Plug Power (PLUG) ahead of the close earnings print. The setup is a turnaround narrative with improving operating loss (narrowing to $109M) and rising revenue drivers (equipment/infrastructure, power purchase agreements, fuel delivered). The stock is also technically basing above the 25-day moving average after a sharp selloff, with upside mapped toward $3.13 if the quarter confirms stabilization. Implied vol is extreme, so a credible beat can re-rate the stock quickly.
Key Risk: Earnings show revenue growth stalls and the operating loss widens again, crushing the turnaround story and sending the stock back below $1.85.
Sell PLUG call spreads expiring after earnings (e.g., sell a higher strike call spread and buy a further OTM call) to monetize the very high implied volatility (146% IV; 116% next week). If the stock doesn’t surge far beyond expectations, IV collapses after the print and the spread decays fast. This pairs well with the market already leaning bullish (put/call 0.17), which often leads to overpricing of upside.
Key Risk: A blowout quarter triggers a sharp upside gap well beyond the sold strikes, keeping implied volatility elevated and forcing losses.
- Plug Power stock rebounded ahead of its financial results.
- The company will release its first-quarter earnings after the US session.
- The options market suggests that the stock will rebound to $3.13 after earnings.
Plug Power stock price is rising today, August 10, as traders wait for its second-quarter earnings report, which will come out after the market closes. It jumped to $2.30, up by 23% from its lowest point this month. This rally will be put to the test when it publishes its financial results, which will shed light on its turnaround.
Plug Power stock is soaring ahead of earnings
Plug Power is a top company in the hydrogen energy industry, where it produces green hydrogen, makes electrolyzers, fuel cells, and provides backup stationary power.
These results come at a time when the company’s growth is continuing, helped by the sale of equipment. Its recent earnings report showed that its revenue jumped to over $163 million in the first quarter from $133 million in the same period last year.
Its sale of equipment and related infrastructure jumped from $63 million to $79 million. Its power purchase agreements rose to $26 million, while the fuel delivered to customers rose to $35 million.
Most notably, Plug Power’s operating loss narrowed to $109 million from $178 million in the same period last year. However, its net loss jumped to $245 million, driven by a surge in fair value of convertible bonds and warrant liabilities.
There are signs that the company’s revenue continued rising in the first quarter of the year. The average estimate among analysts tracking the company expects the upcoming results showed that its revenue remained flat at $169 million in the second quarter.
Plug Power’s earnings-per-share (EPS) is expected to improve from a net loss of $0.18 to 8 cents as the company works to break even.
The company's revenue is expected to jump by 14.6% this year to $813 million, followed by a 18% surge next year to $962 million.
Analysts have a mixed outlook on Plug Power stock ahead of its earnings report. For example, Susquehanna recently lowered its target from $3.75 to $2.50. Morgan Stanley maintained an underweight rating, even as it moved its target from $1.50 to $1.65. BMO Capital Markets also maintained its underperform rating.
Looking forward, the company has an implied volatility of 146% in the options market, much higher than its historical volatility of 58%. Those expiring next week have an implied volatility of 116%. The company has a put/call ratio of 0.17, a sign that it has more calls than puts.
Plug Power share price technical analysis
PLUG stock chart | Source: TradingView
The daily timeframe chart shows that the PLUG stock plunged from a high of $4.3 on June 2nd to a low of $1.85. This support aligns with the lowest level in February this year.
It has now moved above the 25-day moving average and is nearing the strong, pivot, reverse level of the Murrey Math Lines tool. The Relative Strength Index (RSI) has continued rising this month.
Therefore, if the stock rebounds, there is a likelihood that it will rebound to the Major S/R pivot point of $3.13. On the other hand, a drop below the support of $1.85 will invalidate the bullish outlook.
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