Over the course of the past decade, hydrogen fuel cell maker Plug Power Inc’s (NASDAQ:PLUG) stock has been quite volatile. However, things seemed to change for the better in 2014, when it bagged big-ticket clients like Walmart and Amazon. The demand for hydrogen fuel has also increased in recent years and in order to fuel its growth, Plug Power has also had to turn to its shareholders or creditors.
What to Watch Now?
That being said, it is important to figure out whether the Plug Power stock can eventually breakout and create significant wealth for its shareholders. Here is a closer look at the company.
One of the most important things to point out with regards to Plug Power’s operations is the fact that the company has been losing money consistently. While the revenue figure has to $252.5 million over the past year from an average of $14 million per year, it has not actually managed to register a profit.
While the company has stated that it aims to generate revenues to the tune of $1 billion by 2024, it should be taken with a pinch of salt. Plug Power has been making such tall projections for many years, but it has never come to fruition. In clearer terms, the company needs to turn a profit; otherwise, it is going to run out of capital at some point.
In order to fund its business, Plug Power has repeatedly issued more shares, and that has further eroded the value of the stock owned by shareholders. In order words, investors have been paying the price for the company’s inability to turn profitable.
The debt has been rising, and it is servicing it primarily through share dilution. Investors who are looking for stocks that might generate handsome returns in the long could consider looking elsewhere. Even after signing up major clients like Amazon and Walmart, Plug Power has failed to turn a profit.