Plug Power stock continued its strong downward trend, reaching its lowest level since March this year, continuing a downward trend that started in June when it reached a high of $4.31. It dropped to $1.77, with its valuation falling from $5.7 billion to the current $2.46 billion. So, will the sell-off continue or is it safe to buy the dip?
Plug Power stock drops despite making some progress
PLUG stock has been in a strong downward trend even after the company made some strong progress. For example, in a statement last week, the company entered a strategic cooperation agreement with Arcadia eFuels, positioning it as the preferred electrolyzer supplier for its 1 GW projects in Europe and the Americas.
According to the deal, 280 MW of its GenEco electrolyzers will produce hydrogen for its large project in Vordingborg, Denmark. In addition, the company recently announced the shipment of a 1 MW GenEco PEM electrolyzer to HWR Hydrogen, a division of H.W. Richardson Group, expanding its solutions across New Zealand and Australia.
These new developments came after the company published encouraging financial results. Its revenue rose to $178.2 million from $173.9 million in the same period last year. Consequently, its six-month revenue of $341.8 million was higher than the $307 million it made a year earlier.
Most of Plug Power’s revenue came from its sale of equipment,and was followed by the revenue it delivered to customers. The other divisions, like services and power purchase agreements also did relatively well.
Most importantly, the company is making progress in its journey to achieve profitability. Its gross margin reached the break-even point. The gross loss was a $1.67 million, a big improvement from the $53.4 million it lost last year. Plug Power’s net loss of $190 million was better than the $228 million that it lost a year earlier.
The company also boosted its forward guidance. It expects that its full-year revenue will grow by between 15% and 16% and that it will achieve a positive EBITDAS in the fourth quarter. It also plans to strengthen its liquidity position by avoiding dilution. For example, it aims to monetize its data center business and has already sold its Graham plant.
Despite this progress, many investors are unconvinced, with the short interest rising to 21%. This makes it one of the most heavily shorted companies in the industrial sector.
PLUG stock price technical analysis
Plug Power stock chart | Source: TradingView
The daily chart shows that the PLUG stock price has continued its strong downward trend this month. It plunged to $1.76, its lowest level since March this year.
Plug has already dropped below the important support level of $1.87, its lowest level in July this year. It also moved below the lower side of the bearish flag pattern that we noted in our previous report.
Plug Power remains below the 50-day and 100-day Exponential Moving Averages (EMA) and the Supertrend indicator. Therefore, the most likely scenario is where it continues falling, potentially to the psychological level of $1.50.
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