Sign InPlug Power Inc. Sees Bullish Surge and Potential Upside, Analysts Recommend 'Hold' or 'Buy'
Summary
Plug Power Inc. closed at $12.76 on July 17, 2023, showing a 5.11% increase, with positive news about the company's long-term goals and agreements, along with technical indicators indicating a bullish market tendency, suggesting potential upside, making it a 'Hold' or potentially a 'Buy' for aggressive investors seeking long-term growth, although caution should be exercised due to the overbought territory indicated by the RSI.
Introduction
Plug Power Inc. (Ticker: PLUG) is a hydrogen fuel cell company listed on NASDAQ. It closed at $12.76 on July 17, 2023, reflecting a 5.11% increase. This analysis evaluates the stock's price trends, technical indicators, and the recent news to understand its fundamental and technical perspective.
Fundamental Analysis
Plug Power's recent market cap is $7.66 billion, and it has about 600.54 million outstanding shares. This figure might factor into the company's significant liquidity, as indicated by the trading volume of 35.27 million shares, above the average volume of 25.29 million shares.
However, the company reported negative earnings per share (EPS) of -1.31 and a negative price-to-earnings (PE) ratio of -9.74. This implies that the company is currently unprofitable. Further, Plug Power’s discounted cash flow (DCF) of $13.95 is above the last closing price, which may imply the stock is undervalued at present.
On the other hand, news about the company is generally positive. Particularly, Plug Power recently announced an ambitious long-term goal that becomes more achievable due to accelerated hydrogen demand. As the company unveiled new agreements and reiterated their financial objectives for the near-term, medium-term, and long term, this transparency could be encouraging for investors.
Technical Analysis
The stock's recent climb took the price above both the 50-day and 200-day moving averages ($9.38 and $13.20, respectively). Although this could indicate bullish momentum, the Relative Strength Index (RSI) of 82 suggests that the stock might be in overbought territory, which might hint at possible profit-taking or price correction in the short term.
The MACD (3-month) of 0.28 also shows a bullish market tendency, suggesting that the stock’s price currently is on a positive trend.
Price Prediction
The next trading day is expected to carry on the bullish trend. However, the overbought territory highlighted by the RSI might lead to price retracement in the coming days. For the upcoming week, investors should stay vigilant for any signs of price correction.
Analyst Ratings
Analyzing the consensus from various market analysts, we find a broad target range, with the low at $15 and the high at $65. The consensus target is $37.86, and the median target is $39. These figures are considerably higher than the current price, suggesting significant potential upside.
Conclusion: Hold or Buy
In conclusion, despite current unprofitability, the positive future outlook, as well as under-valued price compared to DCF, suggest that Plug Power warrants a 'Hold' and potentially a 'Buy' rating for aggressive investors seeking long-term growth. The company’s strategy to meet increased hydrogen demand and the clarity of their mid-to-long-term plans are significant factors pushing this recommendation. Nonetheless, it is crucial to consider the overbought RSI while planning the entry into the stock, as a potential price correction might offer more favorable entry points in the short term.
