Plug Power (NASDAQ:PLUG) Soars Following Conditional DoE Funding

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Plug Power (NASDAQ:PLUG) surged in trading on Tuesday after announcing a conditional commitment of up to $1.66 billion in loan guarantees from the Department of Energy’s (DOE) Loan Programs Office (LPO). This funding will support the development, construction, and ownership of approximately six green hydrogen production facilities across the U.S.

These facilities will supply Plug Power’s current customers and other major companies with low-carbon, green hydrogen for various applications in material handling, transportation, and industrial sectors.

While Plug Power’s management hailed the Department of Energy’s (DoE) commitment as a “milestone,” they emphasized that the funding is contingent upon meeting certain conditions.

Importance of the DoE Funding for PLUG

This funding is important for Plug Power as it continues to focus on enhancing its cash management. In Q1, Plug Power’s net cash used in operations and capital spending declined sequentially by 38%. However, the company reported disappointing results for the quarter, with a net loss per share of $0.46, wider than estimates by $0.13 per share.

Despite the setback in Q1, Plug Power has taken several measures recently to improve its financial position. These efforts have included restructuring, reducing headcount, asset impairment, and implementing price increases. Additionally, Plug Power is currently facing a class-action lawsuit over allegations of misleading investors about delays in the build-out plans of its green hydrogen production facility.

Is PLUG a Buy or Sell?

Analysts remain sidelined about PLUG stock, with a Hold consensus rating based on eight Buys, 11 Holds, and four Sells. Year-to-date, PLUG has declined by more than 30%, and the average PLUG price target of $4.97 implies an upside potential of around 72% from current levels.



This article was originally published by a www.tipranks.com

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