Shares of Plug Power fell sharply on Thursday after a prominent analyst downgraded the hydrogen-technology company’s stock due to near-term financial uncertainty.
According to Dow Jones Market Data, Plug’s shares plummeted by 9.3% to $3.67 in recent trading, marking the stock’s lowest close since November 27.
Susquehanna analyst Biju Perincheril has downgraded Plug Power’s shares from Positive to Neutral, and also lowered his price target on the stock to $4.50 from $9.
This downgrade comes after a challenging year for Plug Power, as its stock faced a 64% drop in 2023 while the S&P 500 gained about 24%. This performance made 2023 the worst year for Plug since 2012, when it experienced a staggering 76% decline, and it ranked as the company’s third worst year on record.
One significant factor contributing to the decline was the 40% drop in the stock on November 10. This occurred after Plug Power reported its third-quarter financials, which included a warning about its financial position. The company attributed its poor performance to “unprecedented supply challenges in the hydrogen network in North America.”
In a research note, Perincheril explained that while he appreciates Plug Power’s end-to-end solutions for the hydrogen ecosystem, he has decided to step back until there is more clarity regarding the company’s financing and progress on the gross margin front.
For now, Plug Power has not provided any comment regarding this downgrade.
Perincheril has also adjusted his revenue forecast for Plug Power due to delays in building green-hydrogen facilities. His latest projections indicate fourth-quarter revenue of $352 million, down from the previous forecast of $427 million. Furthermore, he has revised his estimates for fiscal years 2024 and 2025 to $1.6 billion and $2.5 billion, respectively, down from the previous estimates of $1.8 billion and $3 billion.