What happened
Shares of Plug Power (PLUG 1.26%) tumbled on Friday, trading 4.7% lower as of 12:30 p.m. ET. Shares of the hydrogen fuel cell maker have been under considerable pressure over the past month, especially after its business update.
With Plug Power's earnings date now inching closer, investors are getting even more jittery even as higher-than-expected inflation and fears of a recession hit growth stocks today.
So what
Friday crushed investors' hopes about inflation in the U.S. slowing down after the Federal Reserve's preferred inflation gauge, the Personal Consumer Expenditures price index -- which excludes volatile food and energy prices -- surged in January. This stoked fears of more interest rate hikes and a recession in the U.S., sending stocks across sectors down today.
Growth stocks in particular are quick to fall on such fears as these companies typically thrive in a healthy economy and often rely on debt for growth. Rising interest rates and a slowdown are big threats to growth, and inflation also often drives up costs for these companies.
Plug Power is one such growth stock whose price took a hit today. This comes just days ahead of its fourth-quarter earnings release on March 1. Expectations from Plug Power are already running low after the company slashed its 2022 guidance significantly some weeks ago.
Plug Power expects to report only 45% to 50% growth in revenue for 2022. That's still massive growth, but remember that the company earlier guided for more than 80% revenue growth for the year.
The company further hinted that a delay in some product launches will hurt its fourth-quarter revenue.
Now what
Since Plug Power provided preliminary numbers for its 2022 top-line growth, the market is already factoring in a disappointing earnings report next week.
That said, 2022 will still be a record revenue year for Plug Power. Also, the company is projecting $1.4 billion in revenue for 2023, which is a huge jump from its 2021 revenue of $502 million. Plug Power also believes it could hit $20 billion in revenue by 2030, but investors aren't placing any bets on that ambitious goal just yet.
