What happened

Hydrogen fuel cell stock Plug Power (PLUG 2.92%) had dropped 7.5% as of 10:35 a.m. EDT Monday after analysts at investment bank Morgan Stanley resumed coverage of the briefly dropped stock at a lower rating.

As StreetInsider.com reports today, MS now rates Plug Power stock not overweight (i.e., buy) as it used to, but only equal weight (i.e., hold).

Glowing red stock chart arrow trending down

Image source: Getty Images.

So what

Curiously, Morgan Stanley's price target on Plug stock is now $35 per share, about 17% above where the stock trades today, which you would think implies the analyst has more of a buy sentiment about it. And indeed, according to the analyst, "PLUG's product advantages, strong balance sheet, and strategic partnerships position the company well for the transition to a hydrogen economy."

The problem is that at Plug's current market capitalization of $17.6 billion, the analyst fears that "even after forecasting double-digit revenue growth and strong margin expansion," the company may have only "modest stock price upside."

Now what

Suffice it to say that this doesn't make a whole lot of sense. Either Plug Power stock is worth 17% more than it sells for today, or it has only "modest" upside -- it can't be both. And in fact, I'd argue it might not be either.

With trailing-12-month revenue of negative $100 million, and trailing losses of more than $560 million, I think there's a lot of uncertainty as to what Plug stock is really worth. I fear there's also a greater than zero chance that Plug Power stock bears significant downside risk to investors -- even after today's sell-off.