Most clean-energy stocks had stellar performance last year due to reducing energy storage costs and rising awareness of climate change. Also, with most countries now formulating long-term plans to reduce their carbon footprints, investors are optimistic about the prospects of this industry.
In alignment with the United States’ goal of achieving carbon neutrality by 2050, President Biden’s $1.52 trillion budget request for fiscal 2022 includes a 27% rise in federal clean energy spending.
As the United States orients itself toward a sustainable future, Wall Street analysts are placing their bets on hydrogen fuel cell energy and solar energy stocks such as Plug Power, Inc. (PLUG) and Array Technologies Inc. (ARRY).
Plug Power, Inc. (PLUG)
Hydrogen and fuel cell company PLUG provides hydrogen fuel cell turnkey solutions for the electric mobility and stationary power markets. The company's product line includes GenKey, GenDrive, GenFuel, GenCare and ReliOn. It offers its products to retail-distribution and manufacturing businesses through a direct product sales force, original equipment manufacturers (OEMs), and dealer networks.
PLUG’s strong value proposition in the growing hydrogen industry is reflected in its $96.30 million gross billings for the fourth quarter, ended December 31, 2020. The company’s fourth-quarter revenue was negatively impacted by $456 million in costs recorded in the quarter, the majority of which were non-cash charges related to the accelerated vesting of a customer’s remaining warrants. It also deployed more than 2,200 fuel cell units in the fourth quarter.
Analysts expect PLUG’s EPS to increase 33.3% year-over-year for the quarter ended March 31, 2021. Its revenue is expected to come in at $469.61 million in fiscal 2021, which represents a 39.4% rise year-over-year.
PLUG announced on April 8that it had been invited to submit a Part II Application for a loan guarantee under the U.S. Department of Energy (DOE) Title XVII Loan Guarantee Program, which is for a proposed $520 million loan guarantee from the DOE to support the use of green hydrogen. Also, in March, the company, along with Brookfield Renewable Partners L.P. (BEP), announced a plan to build a green hydrogen production plant together, utilizing 100% renewable energy from BEP. The stock has gained nearly 677% over the past year and closed yesterday’s trading session at $29.68.
Wall Street analysts expect the stock to hit $57.08 in the near term, which indicates a potential upside of 92.3%. Also, of the 14 Wall Street analysts that have rated the stock, nine rated it a Buy.
Array Technologies Inc. (ARRY)
One of the world’s largest manufacturers of ground-mounting systems used in solar energy projects, ARRY manufactures and supplies solar tracking systems and related products. The company’s products include DuraTrack HZ v3 and SmarTrack, and it sells its products to engineering, procurement and construction firms (EPCs) that build solar energy projects, and to solar developers, independent power producers and utilities.
For its fiscal year 2020 fourth quarter, ended December 31, 2020, the company’s revenues decreased 19.6% year-over-year because of decline in the number of tracker systems delivered. Most of the customers took delivery for most orders during the first and second quarters. However, its revenue has increased 29.5% sequentially to $180.57 million, and its gross profit increased 32.6% sequentially to $35.45 million.
Analysts expect ARRY’s EPS to be $1.04 in fiscal 2022, up 19.5% year-over-year. Its revenue is expected to increase 23% year-over-year to $1.07 billion in fiscal 2021.
On April 13, ARRY announced that it has obtained the ISO:9001:2015 Certification from DQS Inc. in recognition of its commitment to quality and focus on meeting customer needs and successfully completed the rigorous ISO 9001:2015 initial audit process. The company also established its Array Tech Research Centre in March to accelerate tracker innovation and strengthen customer collaboration. The stock has declined 14.4% over the past month to close yesterday’s trading session at $29.57.
Wall Street analysts expect the stock to hit $46.67 in the near term, which indicates a potential upside of 57.8%. Of the 10 Wall Street analysts that have rated the stock, six rated it a Buy.
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PLUG shares were trading at $29.36 per share on Tuesday afternoon, down $0.32 (-1.08%). Year-to-date, PLUG has declined -13.42%, versus a 10.90% rise in the benchmark S&P 500 index during the same period.
About the Author: Ananyo Guha Niyogi
Ananyo’s ardent interest in capital markets, wealth management, and financial regulatory issues, led him to a career as an investment analyst. His goal is to educate individual investors by making complex financial issues easy to understand.
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