Plug Power (NASDAQ:PLUG) stock, once a frontrunner in the hydrogen fuel cell industry, has experienced a significant decline in its share price in recent years. The company has declined in value by 47% YTD, while also declining by more than 90% in the last 3 years.
Despite investor enthusiasm, the company faces headwinds that may impact the share price. Key factors include financial conditions, infrastructure slowdown, and growing operating losses. Investors should sell the stock ASAP due to anticipated pain ahead.
The Hydrogen Slowdown and PLUG Stock
The grand vision of a hydrogen-powered economy is facing headwinds from both a technological and economic perspective. Building the infrastructure needed for large-scale hydrogen production, distribution, and refueling is costly and time-consuming.
Generating green hydrogen is not a walk in the park, and requires a considerable amount of energy and resources. This makes it expensive relative to traditional fuel sources like natural gas.
While the global hydrogen network is expanding globally, the network for hydrogen refueling stations is still very small. This unfortunately limits the appeal for hydrogen-powered vehicles and other transportation sources.
Advancements in battery technology and battery storage solutions continue to rival hydrogen fuel cells in terms of range, cost, and time to market.
With higher interest rates, and growing competition from giants like Linde PLC (NASDAQ:LIN), Plug stock has very limited long term growth prospects.
Failed Execution and Questionable Leadership
Plug power stock has a notorious history of overpromising and under delivering. The company has repeatedly revised its revenue and profitability targets downward, eroding shareholder confidence.
The CEO, Andy Marsh, has been criticized for setting ambitious, unrealistic goals that fail to materialize.
This pattern raises further concerns on management credibility, and lack thereof. Moreover, investors have constantly questioned his ability to effectively steer the company in the right direction.
In addition to falling short on promises, Plug stock also faces the consequences of accounting errors.
The company settled a lawsuit with the SEC back in 2023 after they had to restate several periods, undermining its financial reporting and transparency.
The Impending Doom is Near
Despite a multi-year presence in the industry, Plug power stock has yet to demonstrate any meaningful progress towards profitability.
In fact, their losses have continued to increase YOY and they will have a tough time navigating the uncertainties in the economy in 2024.
Their loss from operations totalled $1.3 billion in FY23, despite a 27% bump in revenue. With a history of missed targets, poor execution, and tighter financial conditions in 2024, investors are best to part ways with Plug Power before the stock drops like a rock.
On the date of publication, Terel Miles did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.