Focus stock to watch: Plug Power Inc (NASDAQ: PLUG)

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Plug Power Inc (NASDAQ: PLUG) stock surged 18.27% on January 6th, 2020 (Source: Google finance) after the company received an order of value more than $172 million, at the close of 2019 from a Fortune 100 customer for hydrogen fuel cell deployments across their distribution network over the next two years. This contract covers the products like Plug Power’s GenDrive fuel cell power, GenFuel hydrogen fuel, storage and dispensing infrastructure, and also for GenCare aftermarket service and support. This sizable contract reflects continual market validation to customer’s rapidly moving material handling business.

Additionally, during the third quarter of 2019, the company had signed a hydrogen supply agreement with United Hydrogen, which was the three-year reserved product supply agreement that offers competitive pricing for Plug Power’s current customer base, while also provisioning for future growth.

Moreover, the global total available market for material handling has current valuation of $30 billion. Plug Power’s turnkey hydrogen and fuel cell solutions are in great demand as it has high utilization environments, where they have a distinct advantage as compared to batteries. Hydrogen fuel cells are used to increase the productivity, lower operational costs and reduce the greenhouse gas emissions. Plug Power customers have posted a 15% increase in the productivity, and savings per year is greater than $1 million in sites with approximately 200 forklift trucks. The company’s expansions with material handling customers due to various contracts, combined with developing sales channels and led to the growth in the European market and are the main drivers to achieve Plug Power’s $1B plan for gross billings in 2024. Further by 2024, the company targets to achieve over $170 million in operating income, and over $200 million in Adjusted EBITDA, which the company now considers to be very attainable.

Moreover, the company has reaffirmed the full year 2019 gross billing guidance, expected to be in the range of $235-$245M. Operating income (loss) for the full year 201 is projected to significantly improve year over year, and the company anticipates positive adjusted EBITDA for the full year 2019.

Meanwhile, the company during the third quarter of 2019, had expanded its presence in Rochester, NY with a new facility to support increased MEA production demand. The company is now the largest U.S. manufacturer of fuel cell membrane electrode assemblies and the company plans to continue to vertically integrate in critical stack components and manufacturing processes.

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