Figure 1 — Plug Power's Stock Performance Over the Past Year
Figure 2 – Plug Power Historical and Projected EBIT/Revenues Calculation
Figure 3 — Before tax, the return on invested capital is slated to reverse directions as early as 2023, in my model.
Figure 4 — The bar graph below denotes the value promised by the tax credit across Plug Power's product lines.
Figure 5 — This bar graph illustrates the revenue breakdown of Plug Power: the vast majority are fuel cell systems, followed by services performed on them, fuel delivery, and finally power purchase agreements.
Figure 6 — The model illustrates a DCF waterfall model approach, claiming that $50.93 is a fair value metric.
Figure 7 — The charts below show Plug Power in the leftmost column, alongside comparable companies on the right-hand side.
Figure 8 — The graph below illustrates the sharp rise in owners' equity in the years 2020 and 2021. This was the the time of the "meme" stock bubble and growth stock rally, which ultimately culminated in a major crash in 2021 that has carried into 2022.
Figure 9 — The Income Statement below illustrates my financial model; EBITDA turns positive in 2024 and EBIT turns positive in 2025.
Figure 10 — This is a Plug Power DCF Sensitivity Analysis. It compares Terminal FCF Growth Rate to the Discount Rate, or cost of capital (WACC).
Investment Thesis and Risks
My analysis indicates that Plug Power remains undervalued and that a reversal in the pricing trend could occur in the next year due to the following reasons:
The following presents the greatest threats to my investment thesis:
Arjun is a junior at The Wharton School at the University of Pennsylvania pursuing a dual degree in chemistry and finance. At Penn, he is involved with the Undergraduate Assembly, Wharton Asia Exchange, Penn Climate Ventures, and South Asia Society. In his free time, he loves to read, golf, hit the gym, and go to the beach with friends.