What happened

Shares of hydrogen fuel cell company Plug Power (PLUG -2.94%) are on a tear in Wednesday morning trading, up 10.3% at 11:30 a.m. EST. It's not immediately clear what's causing the rush of enthusiasm, but I have my suspicions.

So what

Plug reported its third-quarter earnings on Monday. Wall Street wasted no time responding to the report with a spate of price target hikes -- with Roth Capital projecting Plug stock will go to $22 within a year, Oppenheimer saying $23, B. Riley $24, and Craig-Hallum $26, according to TheFly.com.

And most recently, our friends at Tipranks.com tipped us to the biggest price target hike of all: H.C. Wainwright has just raised its price target on Plug Power stock to a Street high of $30 a share. Individual investors are responding to all these hikes as investors are wont to do -- by buying Plug shares hand over fist.

Rising red stock arrow representing a stock going up drawn on a yellow background

Image source: Getty Images.

Now what

This enthusiasm is not entirely without basis. After all, although Plug Power missed analyst earnings estimates badly yesterday, the company did grow its sales 80% year over year. It also reaffirmed its long-term goal of achieving operating profitability ($200 million worth) by 2024, and growing its gross billings to $1.2 billion in that year.

That's quite a reach -- Plug Power is only projected to do about $290 million in sales this year, after all. But Wainwright, in its note, published a prediction that not only will Plug Power grow its sales past $1 billion in 2024, but by 2030, the company will be doing an astounding $7.4 billion in annual business, resulting in a compound annual growth rate north of 38%.

That investors would be elated by such a promise is entirely understandable. I'd just inject one note of caution amid all the enthusiasm: As fast as Plug's sales grew last quarter (80%), its losses grew even faster (117%), and its rate of cash burn faster still. Free cash flow year to date for Plug is now negative $168.2 million -- three times the amount of cash Plug had burnt at this point in time last year.

To me, that seems a better reason to sell the stock than to buy it.