Plug Power’s stock (PLUG) is up 750% this year, according to Morningstar, and it’s still climbing higher.
What is propelling this innovative fuel cells manufacturer?
To start with, it has contracts with two of the largest retailers in the world: Amazon and Walmart, customers that accounted for two-third of its sales in 2018 and half in 2019. Plug’s fuel cells are used in the forklifts that populate the companies’ warehouses. The clean energy cells are quick and easy to recharge, so the forklifts don’t waste a lot of precious time offline in 24-hour-a-day warehouse operations.
Plug’s contracts with those companies are unique in that they are more like exchanges, rather than out-and-out sales. For instance, in 2017 Plug offered the companies warrants for Plug stock for every $50 million of fuel cells they purchased.
The newly found appreciation in Plug’s stock price has made it possible for the two happy customers to earn profits that exceed, by far, what they spend on Plug Power products.
Overall, Amazon has been the better customer. The e-commerce giant is into its third $50 million tranche of orders. This means that Amazon paid $100 million so far for Plug goods and service, plus another $17 for the warrants, Amazon could now be holding Plug stock worth more than $350 million.
On a recent (Nov. 9) earnings call, Plug’s CEO Andrew Marsh described the Amazon contract as “a real positive.”
It sure is, especially for Amazon. It has found a way to support the green energy revolution — and generate revenue at the same time.
Read more stories on Plug Power:
- Plug Power and Gaussin Collaborate on Hydrogen-Powered Transportation Vehicles
- Plug Power Raises Approximately $1B to Accelerate the First Nation-Wide Green Hydrogen Network
- Plug Power Develops New GenDrive Products for The European Market
Source: Tech Report