It was the day after Earth Day, and all over Wall Street, fuel cell stocks were moving a lot this morning. At 10:20 a.m. ET, shares of Plug in the power (NASDAQ: CAP) had increased by 8.2%, Flowering Energy (NYSE: BE) increased by 9.3%, and Fuel cell energy (NASDAQ:FCEL) fared best – up 11.9%. Given the timing, investor interest in renewable energy stocks this week was probably to be expected.
But thanks to Plug Power, there’s good news behind that excitement.
Plug sees path to profitable growth
Plug announced today that it has “reached design capacity” (i.e., full production capacity) at its plants in Georgia and Tennessee. Plug’s Louisiana plant is “on track” to record the same in the third quarter. As a result, Plug produces approximately 25 tonnes per day (TPD) of liquid hydrogen and is on track to reach 40 TPD over the next five months.
What does this mean for Plug? Like gasoline, hydrogen prices change from day to day. Additionally, Plug says it is “recalibrating” its prices to reflect “the value of Plug’s services.” Yet a recent quote from California suggests prices can reach $36 per kilogram. Operating all three plants at maximum capacity, Plug Power could soon generate $1.4 million in daily hydrogen sales, or about $525 million per year.
Added to the $891 million in revenue Plug generated from fuel cell sales last year, that means Plug should soon become a billion-dollar-plus company, and Plug says it is now on the right track “to achieve profitable growth”.
Buy fuel cell stocks?
This seems like good news for Plug, and investors seem to agree that what’s good for Plug will also be good news for FuelCell Energy and Bloom Energy.
But the opposite is also true. Plug’s revenue may be growing, but despite a steady increase in revenue, Plug Power has Never has made a profit, after more than 25 years of trying. On the contrary, the more Plug sells, the more money it loses. The same goes for Bloom and FuelCell, each of which has lost money for more than 10 years.
I wouldn’t buy any of them.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a
