Why Plug Power Inc (NASDAQ: PLUG) stock is soaring

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Plug Power Inc (NASDAQ: PLUG), the company that is leader in providing hydrogen engines and fueling solutions enabling e-mobility, stock surged 15.44% on June 23rd, 2020 and continued its bullish momentum rising over 13.7% on 24th June, 2020 (as of 12:22 pm GMT-4 ; Source: Google finance). The company completed the acquisitions of United Hydrogen Group Inc. and Giner ELX. These acquisitions are according to the plan of the Company’s vertical integration strategy in the hydrogen business laid out in September of 2019. The company has plan to have over 50% of the hydrogen used to be green by 2024. These activities is expected to further increase Plug Power’s position in the hydrogen industry with capabilities in generation, liquefaction and distribution of hydrogen fuel  complementing its industry-leading position in the design, construction, and operation of customer-facing hydrogen fueling stations. These activities will further establish a clear pathway for PLUG to transform from low-carbon to zero-carbon hydrogen solutions.

On the back of these acquisitions, the Company has raised its 2024 financial targets to achieve $1.2 billion in revenue (up from $1 billion), $210 in operating income (up from $170 million), and $250 million in Adjusted EBITDA (up from $200 million). PLUG has target to become one of the largest green hydrogen generation companies in the United States over the next five years and globally thereafter, and has plans to continue to work with existing and new partners for the accomplishment of this goal.

Moreover, the planned capacity addition of green hydrogen is expected to position the Company to target existing large and growing hydrogen markets. PLUG has estimated that its existing customers will use almost 100 tons of hydrogen per day by 2024 and anticipates over 50% of that to be green hydrogen. This planned green hydrogen generation capacity expansion will give PLUG the opportunity to serve its existing customers and serve large industrial customers in the steel, fertilizer and ammonia manufacturing markets. According to Bloomberg New Energy Finance, the cost of green hydrogen is projected to fall by over 50% by 2030 and will be at parity with traditional ways of producing hydrogen today.

Currently, United Hydrogen has the capability to produce 6.4 tons of hydrogen each day with plans to increase that capacity to 10 tons daily in the near future, along with plans for further expansion. Therefore, the acquisition of United Hydrogen Group will significantly enhance PLUG’s capabilities in hydrogen generation, liquefaction and distribution logistics. Furthermore, PLUG expects the Giner ELX acquisition will significantly increase its overall green hydrogen supply capabilities and the Company can add significant manufacturing capabilities immediately to serve the global market for electrolyzers.

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