Shares of Plug Power (PLUG, Financial) experienced a significant jump of 20.87% recently. This surge follows the release of final rules for the clean hydrogen production tax credit as part of the Inflation Reduction Act (IRA), which is expected to benefit the company.
Plug Power Inc (PLUG, Financial), trading at a price of $3.18, has garnered attention due to its potential to capitalize on new tax credits. These tax credits are part of an effort to boost green hydrogen production by expanding the definition of clean power, thus increasing competitiveness.
Despite the favorable regulatory environment, Plug Power faces several financial challenges. The company reports financial distress, as indicated by an Altman Z-Score of -1.31, which suggests a possibility of bankruptcy within the next two years. Additionally, the company's Piotroski F-Score is low at 2, reflecting potential operational difficulties.
However, there are some positives for Plug Power. The company's Beneish M-Score of -2.86 indicates that it is unlikely to be a manipulator. Moreover, the company has shown resilience, with price changes indicating potential recovery.
Plug Power's market cap stands at approximately $2.9 billion, and its price-to-book ratio (PB) is 0.92. The GF Value suggests that there might be potential in the stock, with a GF Value estimate of $5.75.
While Plug Power has opportunities to exploit the new tax credits, it's essential for investors to remain cautious due to its ongoing financial uncertainties. The company's focus on building an end-to-end green hydrogen ecosystem could position it well for future growth, but the path remains complex given its financial struggles.
