From the start of the year until the end of trading last week, Socket Power (NASDAQ: CAP) the stock significantly underperformed the market. While the S&P500 rose 7.4% during that period, Plug Power’s stock price fell about 18%.
However, one Wall Street analyst believes that Plug Power stock is poised to reverse this downward trend and move higher. Increases price target 33% from $3 to $4, Jordan Levy, analyst at Truist Financialthinks Plug Power could rise about 16% from Wednesday’s closing price of $3.43.
Levy attributes the stock’s higher price target to investors’ continued enthusiasm for the company’s hydrogen production announcement. In late January, Plug Power announced that it had started operations at a liquid hydrogen production facility in Georgia, an important step in its quest to develop a robust hydrogen production infrastructure. The power supply to the outlet is targeting daily hydrogen production of 2,500 tonnes by 2030.
Investors are missing the mark on Plug Power if they click the buy button
For hydrogen investors who find Levy’s price target encouraging, it is important to wait before acquiring shares. Levy set the $4 price target just before the company reported its fourth-quarter 2023 financial results on Friday morning. As the company grew its revenue 27% year over year , Plug Power, unsurprisingly, reported a sharp loss of $2.62 per share, which was a bigger loss than the $1.25 per share loss reported during the same period last year.
Shares are unlikely to rebound anytime soon and hit Levy’s price target. And even those who believe this will be the case should look elsewhere. The company’s continued inability to generate profits and generate organic cash flow is deeply concerning. Until Plug Power demonstrates its ability to grow earnings as well as revenue, it’s best to keep an eye on this stock.
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Scott Levine has no position in any of the stocks mentioned. The Motley Fool ranks and recommends Truist Financial. The Motley Fool has a disclosure policy.
Plug Power stock has 16% upside potential, Wall Street analyst says was originally published by The Motley Fool
