Poised to end 2025 on a positive note, shares of Plug Power (PLUG +0.90%) are climbing higher today. With an analyst providing an optimistic outlook on the fuel cell stock, investors appear eager to purchase shares before celebrations begin tonight to ring in the new year.
As of 10:54 a.m. ET, shares of Plug Power are up 2.3%, pulling back from their earlier rise of 5.7%.
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Plug's profitability is no pipe dream
Upgrading Plug stock to buy from hold and reducing the price target to $3 from $3.50, Clear Street analyst Tim Moore informed investors that he believes the fuel cell stock is on a "path to profitability," according to thefly.com.
NASDAQ: PLUG
Key Data Points
Moore cites the company's $200 million cost savings initiative, as well as higher pricing, as two factors that could contribute to the company improving its financials. In particular, Moore calls out the company's Allied Green Ammonia contract as the spark that could lead Plug to achieve positive adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA).
Based on Plug's stock closing at $1.94 yesterday, Moore's $3 price target implies upside of more than 54%.
What's a potential Plug investor to do now?
While Moore's improved outlook for Plug is worth noting, it's hardly sufficient cause for investors to power their portfolios with the beleaguered fuel cell stock. Plug has a long history of failing to generate profits, and the more prudent approach now would be to verify that the cost-saving initiative is producing results -- such as an improving gross profit margin. At this point, Plug should remain a consideration only for those with extremely high risk tolerances.
