What happened
Shares of Plug Power (PLUG 8.21%) are getting hit hard with sell-offs recently. The hydrogen technology company's stock was down roughly 12.4% since last week's market close as of 1:45 p.m. ET Friday, according to data from S&P Global Market Intelligence.
There doesn't appear to be any fresh, company-specific news sending the hydrogen technologies specialist's shares lower this week, but it's not surprising to see the stock down double-digits at a time when investors have a mounting collection of risk factors to consider. Growth stocks have been hit with a veritable perfect storm of bearish catalysts lately, and Plug Power is losing ground in conjunction with negative market momentum.
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So what
Stocks kicked off the week with big sell-offs amid concerns that conflict could soon escalate between Ukraine and Russia, and the bearish hits kept coming. Subsequent confirmation from Federal Reserve Chairman Jerome Powell that the central bank will increase interest rates in the near future raised concerns that more substantial rate hikes could follow, and some large, growth-focused companies have also given investors worrying news lately.
Last week, Peloton and Netflix published disappointing business updates and guidance that prompted far-reaching pullbacks for growth stocks, and Tesla's fourth-quarter report arrived on Jan. 26 with another round of worrying guidance. The electric vehicle leader actually beat the market's sales and earnings expectations in Q4, but it won't be rolling out any new models this year due to ongoing supply chain issues.
With Plug Power potentially facing its own supply constraint headwinds and a litany of other risk factors prompting investors to move out of growth-dependent stocks, the company's valuation has come under pressure.
Now what
It's been a rough week for Plug Power shareholders, but it wasn't all bad news. Susquehanna analyst Biju Perincheril published a note on Wednesday initiating coverage on Plug Power with a positive rating and a $26 one-year price target on the stock. As of this writing, that suggests roughly 40.5% upside on the stock.
Perincheril said he expects that Plug Power will be able to post double-digit annual revenue growth through the next decade. There could be a massive market for the company's hydrogen fuel technologies, but the company's growth-dependent valuation predisposes the stock to big swings when volatility strikes the market.
Plug Power now has a market capitalization of roughly $10.6 billion and is valued at approximately 11.7 times this year's expected sales.
