Source: T. Schneider / Shutterstock.com
Plug Power (NASDAQ:PLUG) stock has taken a sharp downward turn despite news that the liquid hydrogen maker has restarted operations at its Charleston, Tennessee plant. Indeed, PLUG stock is in the red by 6% today even given the company’s new production capacity.
What’s bringing PLUG stock down today?
Well, investors seem to be more preoccupied with a recent downgrade than Plug Power’s new production milestone. Specifically, Seaport Research analyst Tom Curran recently downgraded shares to “neutral” from “buy” without stating an explicit price target.
According to Curran, Plug Power will fail to reclaim any real attention until it makes more meaningful progress toward profitability.
“We see balanced risk-reward at this valuation while PLUG seeks to raise the requisite capital, stanch cash burn, and improve margins,” noted the analyst. “Over the rest of 2024, PLUG should be focused on raising its necessary external funding with as little dilution as possible and slashing its cash burn rate […] We think it’s far from certain that PLUG will manage to orchestrate the lowest total cost, optimal solution.”
PLUG Stock Sinks Despite Lower Hydrogen Costs
Curran’s downgrade has taken the wind out of Plug Power’s sails today. Indeed, if not for the downgrade, one might assume that PLUG stock would enjoy the benefits of the company’s restarted operations in Charleston, Tennessee.
The plant should be capable of producing 10 tons of liquid hydrogen per day, easing some supply tensions and bringing Plug’s average cost down in the process.
“This liquid hydrogen production out of Georgia and Tennessee is expected to bring down the average cost of delivered hydrogen, positively impacting Plug’s fuel margins in line with our strategy,” said Plug Power Chief Strategy Officer and General Manager of Energy Solutions Sanjay Shrestha.
Today’s losses only add to PLUG stock’s troubles this year. Indeed, the hydrogen fuel cell maker is down more than 8% so far this year while the S&P 500 enjoys a 5% gain over the same period. In the past 12 months, PLUG stock has shed more than 70% of its value.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.