Plug Power stock analysis: here’s why it may soar 42% this year

Plug Power stock retreated by over 10% on Thursday, erasing the gains made on Wednesday. It crashed to the important support level at $3 as investors started to book profits. Still, it remains much higher than the year-to-date low of $1.72.

Focus turns to Plug Power earnings 

Plug Power stock jumped sharply on Wednesday as investors cheered the strong Bloom Energy earnings, which pushed it to a record high. Bloom’s earnings showed that its revenue more than doubled, helped by the strong artificial intelligence (AI) demand.

The stock has been in a strong uptrend since it published its results in March this year. These results showed that its business continued rising in the previous quarter, helped by the fuel deliveries to customers. 

The results revealed that the power purchase program rose from $97.8 million in 2024 to $133.4 million last year. This was a strong number considering that it made $66 million in 2023.

Plug Power’s services performed on fuel cell systems and related infrastructure rose from $52.16 million to over $94.4 million last year. 

However, the company’s biggest business, the sales of equipment to customers, fell to $371 million from $390 million a year earlier. This segment has been deteriorating as its revenue peaked at over $711 million in 2023.

Most importantly, analysts believe that its revenue growth will continue growing in the coming years, ending a prolonged period of deterioration. For example, the average estimate among analysts is that its revenue will jump by 13% this year to $802 million. It is also expected to grow by 18% to $947 million next year.

Another notable benefit is that analysts believe that its losses will continue narrowing, with the average earnings-per-share (EPS) expected to improve to minus $0.3 from last year's 85 cents. 

Still, the main risk for the company is that it mat need to raise capital before it breaks even, continuing the dilution that has been going on for years. The most recent results showed that it ended the quarter with $368 million in cash and equivalents and $186 million in restricted cash.

Plug Power stock price technical analysis

PLUG stock chart | Source: TradingView 

The three-day chart shows that the PLUG stock price has moved upwards in the past few weeks, moving from a low of $1.7% in March to the current $3.17.

It has moved above the crucial resistance level at $2.60, its highest point in January this year. Also, the 50-day and 100-day Exponential Moving Averages (EMA) have formed a bullish crossover pattern, which is a highly bullish sign in technical analysis.

The Relative Strength Index (RSI) and the two lines of the Percentage Price Oscillator (PPO) have continued rising this month.

Therefore, the stock may keep rising as bulls target the next key resistance at $4.52, its highest point in October last year. This target is about 42% above the current level. 

The next important catalyst for the stock will be its earnings, which will come out on May 11 this year. On the flip side, a drop below the key support at $2.50 will invalidate the bullish outlook.