Beginning the summer on a bullish note, shares of Plug Power (NASDAQ:PLUG) jumped in June, but the market's excitement for the fuel cell stock wasn't sustained in July -- a month during which the stock fell 20%, according to data from S&P Global Market Intelligence.
Although analysts at Citigroup and Seaport Global both initiated coverage on Plug Power's stock last month, assigning it a buy rating, investors weren't motivated enough to pick up shares. Between the company failing to provide details about a new deal and competition ramping up among hydrogen-focused companies, investors felt the clouds were hanging too heavily on this familiar fuel cell name.
On July 14, Plug Power reported that it will collaborate with Apex Clean Energy on developing a green-hydrogen production facility. The market, however, didn't celebrate the news. Plug Power failed to provide insight into the financial details of the partnership, suggesting to investors that the deal won't be material to its finances.
Plug Power has long touted the massive opportunity that the burgeoning hydrogen economy represents. But competitors aren't sitting by complacently and letting Plug Power charge ahead uncontested -- and that troubled the company's investors last month.
An upstart manufacturer of fuel cell vehicles, Hyzon Motors (NASDAQ:HYZN), reported several developments last month that investors interpreted as a growing threat for Plug Power's ambition to expand into the transportation market. For one, Hyzon reported that it agreed on a memorandum of understanding with an Australian manufacturer to produce and supply 20 trash collection vehicles powered by hydrogen fuel cells. Additionally, Hyzon announced that it's collaborating with Chart Industries to develop heavy-duty commercial vehicles.
But it's not only Hyzon that pressured Plug Power's stock last month. Ballard Power Systems reported positive news, including the sale of its fuel cell modules for use in electric buses and an electric train.
It's understandable why the bears woke up last month. The lack of details regarding the Apex Clean Energy deal certainly suggests that it won't electrify the company's earnings as investors would've hoped. Regarding the growing competition, though, investors' fears seem to be overblown. There will be plenty of winners as the hydrogen economy grows.
Nonetheless, investors will certainly want to pay close attention to the company's second-quarter 2021 earnings report for further insights.