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Plug Power's Lowered Guidance Lacking Detail, Analyst Says

'Details were not provided,' Coker Palmer analyst Vaibhav Vaishnav writes. He has a price target of $13 for the stock, compared to its recent quote of $32.08.
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While Plug Power  (PLUG) - Get Plug Power Inc. Report shares firmed Friday after the hydrogen technology company’s earnings guidance beat expectations, at least one analyst wanted something else: details.

“Details were not provided,” Vaibhav Vaishnav of Coker Palmer Institutional wrote in a commentary. He sees tough sledding for Plug Power’s stock in the near term, with a price target of $13. He rates Plug Power a sector underperform.

The stock recently traded at $32.08, up 0.8%.

Among the details Vaishnav sees as missing: Specifics on the company's $3 billion revenue estimate as well as investments needed to achieve its stated targets.

“The company spoke only about $1 billion in revenue from material handling and $700 million from hydrogen fuel,” Vaishnav said. “We assume the current four segments together total $1 billion, and $700 million is from third-party sales. PLUG also mentioned three gigawatt installed electrolyzers by 2025," the analyst wrote.

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What's more, Plug Power is targeting 500 Temperature Programmed Desorption (TPD) plants and 1,000 TPD plants by 2025/'28 respectively. 

"Each 20 TPD plant costs $100 million, implying $2 billion/$4 billion capex beyond the initial 100 TPD targeted by the end of 2022," Viashnav wrote. "PLUG intends to build a GW factory in Korea and a 2 GW factory in Australia. The HYVIA production facility could cost $200 million.

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Also lacking additional detail, according to Viashnav: the company's estimates on how much it can make on hydrogen sales.

“The average purchase price for hydrogen from third parties, the amount of hydrogen lost in storage/transfer and the selling price to internal customers," Vaishnav said.

"The company estimates it can generate 30% gross margins at $6/kilogram, which makes sense to us. But we look for clarity on translation from the $6/kg selling price to an effective price realized of $4/Kg in 2019/’20/1H ‘21.”