Plug Power (PLUG -4.37%) is a volatile stock, no doubt. In 2021, shares of this small energy company maxed out at $73 per share. Today, they trade hands at just $2.40. What has soured investors so much on this small-cap stock and where do Wall Street analysts think it could now be headed?
Staking out a place in energy's future
Plug Power is focused on developing hydrogen systems. The market potential could be huge: $1.4 trillion, by one estimate. But the company also faces challenges. Hydrogen fuel isn't yet cost efficient, and competitors are also cropping up.
The uncertainty has left analysts with a range of opinions. According to data from FactSet, 30 analysts cover the stock. Nine rate it a buy or overweight, 17 rate it a hold, and four rate it a sell. If you average those together, the consensus rating for Plug Power stock is a "hold." That's a big change from three months ago, when the consensus was a "buy."
When it comes to share price targets, the highest for Plug Power is $18 while the lowest is $2. The median stands at $4 -- still meaningfully higher than the current stock price of $2.40.
Before you deem the shares a buy, however, take note of two things. First, Plug Power's stock price is changing fast. Over the last 30 days, shares have lost nearly one-third of their value. Analyst price targets likely need time to catch up to current conditions.
Second, analysts haven't proven very reliable when it comes to predicting this volatile stock. Three months ago, when the consensus rating on the stock was "overweight," the stock price was nearly 50% higher than where it is today.
There are a lot of concerns with Plug Power stock right now, and the dip in analyst expectations seems to reflect that reality. While some price targets still seem to suggest massive upside, be sure to dig into the numbers yourself to arrive at your own conclusions.
