New
Every Plug Power Investor Should Keep An Eye On This Number
From a business standpoint, Plug Power (NASDAQ: PLUG) has clearly succeeded this year at selling customers on the value of its fuel cells and hydrogen business. Investors, on the other hand, haven't exactly been sold on the value of Plug Power stock. While the S&P 500 has ripped more than 24% higher since the start of the year, shares of Plug Power have plummeted about 43%.
But management remains ever hopeful that the company is on the right path, and financial success is right around the corner. There are a variety of numbers that investors should keep watch over. One number that seems especially critical to monitor at this point is the company's gross profit.
Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »
The end of 2025 could be a pivotal moment for Plug
Although Plug consistently fails to generate a gross profit, management believes that the end of 2025 will see the company reverse this trend. During an investor presentation in November, management projected that the company would report a 2025 gross margin of negative 20% to negative 5%, and it would end the year with a positive gross margin run rate. For context, Plug Power had a negative 57% gross profit margin for 2023.
Should the company achieve this guidance, it gives more credence to management's belief that the company will achieve profitability on an earnings before interest, taxes, depreciation, and amortization (EBITDA) basis by the end of 2026 and positive operating income by the end of 2027.
Is now the time to power your portfolio with Plug stock?
For those who find management's 2025 gross profit forecast inspiring, it's important to recognize that the company generally provides hopeful forecasts -- forecasts that haven't necessarily come to fruition. Those skeptical of management's guidance, therefore, are not being unfairly critical.
Additionally, it's important to recognize that Bloom Energy (NYSE: BE), one of Plug's peers, is already generating a gross profit. Moreover, Bloom Energy is considerably closer to generating positive EBITDA; thus it may appeal to growth investors who want fuel cell and hydrogen exposure, yet are similarly interested in assuming a lower degree of risk.
Don’t miss this second chance at a potentially lucrative opportunity
Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.
On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
- Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $362,166!*
- Apple: if you invested $1,000 when we doubled down in 2008, you’d have $48,344!*
- Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $491,537!*
Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.
*Stock Advisor returns as of December 23, 2024
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
