Why Plug Power, Bloom Energy and FuelCell Energy stocks exploded today


What happened

Fuel cell stocks exploded on Monday after the House of Representatives finally passed a landmark $ 1.2 trillion infrastructure bill, paving the way for long-awaited federal spending on U.S. infrastructure, including big investments in clean energy. As of 11:25 a.m. EST Monday, here’s how major fuel cell inventories had recovered:

So what

The bill that was passed on November 5 calls for investments in the infrastructure sector, including $ 7.5 billion in zero or low emission buses and ferries and an additional $ 7.5 billion in infrastructure charging of electric vehicles.

Hydrogen fuel cell technology is getting a lot of attention lately from clean energy enthusiasts. California, for example, sees hydrogen fuel cell electric vehicles as essential to meeting its goals of 1.5 million zero-emission vehicles by 2025.

While neither Plug Power, Bloom Energy, nor FuelCell Energy directly supplies the electric vehicle industry, each is striving to carve out a place for itself in the clean energy space.

Image source: Getty Images.

Bloom Energy, for example, builds energy servers that provide uninterrupted renewable electricity supply through solid oxide fuel cells that convert natural gas and hydrogen into electricity. Some of the world’s largest companies are already using Bloom Energy’s servers.

Bloom Energy’s stock jump today, in fact, is a carry over from last week when stocks erupted after the company reported record acceptances – or the volume of servers installed in a given time frame – of 353 systems in the third quarter. Bloom Energy recently signed a massive four-year contract worth $ 4.5 billion in revenue with South Korea, which has skyrocketed the stock, and today announced its first biogas project. dairy farm that converts cow waste into renewable electricity.

FuelCell Energy, on the other hand, primarily builds fuel cell power plants and recently saw strong revenue growth for its third quarter. The company, however, does not have a backlog of products, earns revenue from services at the moment, and has raised funds primarily through the sale of stocks. These are just a few of the reasons FuelCell Energy stocks have underperformed their peers in recent months. And that, ironically, could also explain why FuelCell Energy stock has jumped the most today – it seems to be catching up with rivals, as investors believe all clean energy companies could benefit from the Biden administration.

Graphic PLUG

PLUG given by YCharts

So far, Plug Power has performed the best thanks to multiple agreements and aggressive efforts to expand its hydrogen footprint. Examples include collaborations with energy and aerospace giants, a partnership to build a massive electrolyzer plant in Australia, an alliance with a drone maker in Israel, and a plan to build the largest plant. of green hydrogen on the west coast of California.

These agreements also reflect the company’s efforts to expand its end-user market base beyond the niche market, fuel cell forklifts. Last Thursday, SMBC Nikko analyst David Havens launched a cover on the Plug Power stock with a price target of $ 50 per share, citing long-term opportunities for hydrogen fuel cells in multiple areas, including transport, power generation, heavy and medium vehicles. applications, backup power and distributed power.

Now what

With these fuel cell stocks already making massive moves, it will now be up to Plug Power, Bloom Energy, and FuelCell Energy to show tangible growth to maintain their stock price momentum.

Meanwhile, all eyes will be on Plug Power as it releases its third quarter numbers tomorrow, November 9. Plug Power recently requested sales, or gross billings, worth $ 825 million to $ 850 million in 2022 and $ 3 billion in 2025. By calculation, its gross billings could increase by almost 50% and exceed $ 500 million in 2021. If the company guides somewhere, even close tomorrow, the stock could climb even higher.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Challenging an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.

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