Shares of Plug Power Inc. (NASDAQ: PLUG) in February broke through the $5 barrier for the first time in five and a half years. The stock posted a new 52-week high of $7.54 on Wednesday following the company’s announcement that it had closed two acquisitions as part of a vertical integration plan in the business of generating, liquefying and distributing hydrogen fuel.
Perhaps the company is doing a little coattail riding on the investor interest in Nikola Corp. (NYSE: NKLA), a maker of hybrid hydrogen-electric and hydrogen-powered semi trucks. Nikola came public earlier this month in a reverse merger that saw the stock jump from around $31.37 to nearly $94 in just four trading sessions.
Nikola’s first semis are due to hit the market until next year, and its electric and hydrogen pickups are not due until two years later. Still, hydrogen-fueled vehicles are getting a lot of mindshare right now (could it be the Robinhood effect?) and Plug Power happens to be in the right place at the right time.
Plug Power’s acquisitions, United Hydrogen Group and Giner ELX, are, respectively, a merchant producer of hydrogen and a hydrogen generator maker. In the first quarter of this year, the company reported daily consumption of hydrogen as a transportation fuel reached 27 tons.
By 2024, the company expects that existing customers alone will use nearly 100 tons a day and it anticipates more than half of that amount to green. Plug Power’s current capacity for generating hydrogen is 6.4 tons per day, and the acquisition of United Hydrogen Group is expected to lift that total to 10 tons.
The company also makes hydrogen fuel cell engines for several classes of trucks and buses, including semis. In the first quarter of this year, the company and its partner Lightning Systems built the first electric fuel-cell Class 6 (up to 12.5 tons) truck. Vehicles of this size typically move goods from a warehouse to a distribution center.
The truck has a standard range of more than 200 miles on a 20-kilogram tank of hydrogen and an extended range version can double the standard range.
On the strength of these completed acquisitions, Plug Power has raised its fiscal year 2024 revenue target from $1.0 billion to $1.2 billion and its operating income target from $170 million to $210 million. The target for adjusted EBITDA was lifted from $200 million to $250 million.
In the noon hour Wednesday, Plug Power stock traded up 20% at $7.72, just a penny below its 52-week high set earlier in the day. The stock’s 52-week low is $1.88, and the 12-month consensus price target was $6.33 before Wednesday’s action. Average daily volume of around 12.6 million shares already had soared to 48.4 million shares traded on the day.