Shares of fuel cell and hydrogen specialist Plug Power (PLUG -0.47%) may have nudged higher in the beginning of the year, but the market's enthusiasm was hardly sustained. After its short rise in late January, shares of Plug dipped lower and continued to plunge for the remainder of the year due to a variety of factors, extending a slide that amounted to a 64% drop in 2023.
According to data provided by S&P Global Market Intelligence, shares of Plug Power fell 52.7% in 2024.
NASDAQ: PLUG
Key Data Points
Several factors powered the stock's decline last year
From analysts providing bearish outlooks on Plug stock to the company's disappointing first-quarter 2024 financial report, there were several factors that pushed Plug stock lower in the first half of 2024. The second half of the year didn't provide much of a reprieve.
Failing to meet analysts' estimates that it'd post second-quarter 2024 revenue of $184.9 million and a $0.29 loss per share, Plug reported $143.4 million on the top line and a $0.36 loss per share. The company's poor performance also reflected a weaker performance than the $260.2 million in revenue it reported during the same period in 2023.
Similarly, the company came up short of expectations for the third quarter. Instead of the $210.2 million analysts had suspected Plug would report for third-quarter 2024 revenue, the company reported sales of $173.7 million, representing an inferior performance to the $198.7 million it reported for Q3 2023.
Another source of discontent for investors came with management's gross profit margin forecast for 2025: -20% to -5%. While one of Plug's leading fuel cell peers, Bloom Energy (BE +6.68%), consistently reports a gross profit, Plug continuously fails to do the same. Evidently, Plug investors are losing patience with management's ongoing contention that profitability will be coming soon, and they're eager to see results.
After Plug's poor performance in 2024, is it a good time to buy in 2025?
Plug stock has roared out of the gate to start 2025, rising about 25% in response to favorable news about the hydrogen tax credit. The market's enthusiasm, however, seems overdone, and there are plenty of risks that remain regarding Plug -- mostly surrounding the company's persistent inability to post a profit or generate positive cash flow.
Potential investors will want to remain acutely focused on how the company wraps up 2025, as management seems optimistic that the company could end the year on better financial footing than when it began. Nonetheless, until the company strengthens its financial well-being, Plug should only remain a consideration for those with ample risk tolerance.
