What happened
Plug Power (PLUG 6.52%) stock surged Wednesday morning and was trading 10% higher as of 9:45 a.m. ET on the back of the hydrogen fuel cell maker's latest updates about its growth plans and revenue expectations through 2030.
So what
Plug Power held its fifth annual Plug Symposium Wednesday morning. Here are the key numbers that Plug Power announced during the event that sent its stock flying higher.
| Year | Revenue forecast | Gross margin forecast |
|---|---|---|
| 2023 | $1.2 billion | NA |
| 2027 | $6 billion | 32% |
| 2030 | $20 billion | 35% |
Data source: Plug Power's Plug Symposium event presentation.
Management foresees exponential growth in revenue in the coming years -- it expects to grow its top line by a compound annual growth rate of 50% between 2023 and 2030, driven by its investments in the hydrogen ecosystem. For perspective, the company generated around $700 million in revenue in 2022.
Plug Power believes demand for green hydrogen is already outpacing the scale-up of hydrogen-producing projects in the U.S., which could leave a demand-supply gap over the next five to 10 years. To take advantage of the boom, Plug Power is striving to provide end-to-end hydrogen solutions, from producing and storing hydrogen to delivering it directly to end users. While Plug Power is primarily targeting the electric vehicle market with its fuel cells, it also sees high growth potential in the stationary power and equipment rental markets. The company is expanding its hydrogen networks in North America and Europe.
Also on Wednesday morning, Plug Power signed a Memorandum of Understanding with Australian metals and energy company, Fortescue to evaluate a potential agreement to supply equipment like electrolyzers, liquefiers, and storage tanks for the latter's green hydrogen projects in Australia and North America. The two companies are also exploring options for Fortescue to acquire a 40% stake in Plug Power's Texas hydrogen plant, and for Plug Power to acquire a 25% stake in Fortescue's proposed plant in Phoenix.
Now what
To be fair, this isn't the first time that Plug Power has outlined long-term financial goals. In fact, the company had already projected a revenue of $20 billion and a gross margin of 35% for 2030 earlier this year.
The stock's run-up on Wednesday, therefore, could simply be a dead-cat bounce, especially after its dramatic decline in recent weeks. Plug Power stock fell 10% in September alone on the back of an ongoing investigation by the Securities & Exchange Commission, and was down by around 33% over the past three months until Wednesday morning. Investors, perhaps, are relieved that Plug Power is at least still foreseeing that it can hit those prior long-term financial goals, even if it has no clear path to profitability yet.
