Plug Power (NASDAQ: PLUG) and Bloom Energy (NYSE: BE) are competitors in the hydrogen fuel cell business. But with each focused on growing in different niches, we wondered which was the better investment right now?
Plug Power created the world's first commercially viable market for hydrogen fuel cell (HFC) technology. Thus the company has deployed more fuel cell systems for e-mobility than any of its other competitors. It provides fuel cell systems for some big names such as Amazon, Walmart, Nike, and Home Depot.
Plug Power diving into the world of busses and is partnering with BAE systems, collaborating to provide 'heavy-duty transit bus OEMs' with zero-emission powertrain systems. Plug Power has also recently signed an agreement with the French auto dealer 'Groupe Renault' with whom they will help build a fleet of hydrogen-powered delivery vans and busses.
Furthermore, the company recently announced where its next three hydrogen plants will be based: Georgia, Pennsylvania, and New York. The working plan is to have the first two of these operational by the end of 2022, joining the current existing Tennessee plant in a new green hydrogen network.
In the most recent quarter, Plug brought in just under $72 million in net revenue. Whilst this did not hit targets, it is still up 76% year-over-year (YoY). Unfortunately, net loss per share came in at $0.12, seeing no change from the same period a year before. This is a recurring theme as the company is notoriously unprofitable, turning out a quarterly profit just once in the last decade. Additionally, having ended the last year with $780 million in debt, the company is particularly vulnerable.
The company also faces heightened competition from FuelCell Energy, Ballard Power Systems, and Bloom Energy.
Bloom Energy (NYSE: BE) is also a hydrogen fuel cell company. But Bloom produces component parts for clean energy generation in major businesses Its many customers include Yahoo, IBM, Target, Walmart, and Morgan Stanley. Indeed, its customers are so varied and diversified that it is guaranteed to bring in revenue during periods of market uncertainty.
Bloom became a popular choice amongst alternative energy investors as the company's share price soared 280% in 2020 from just under $8 to around $30 in 2020. Currently, it is just over $20, which is up 23% YoY.
Bloom Energy also entered into a financial partnership with NextEra one year ago, whereby NextEra bought a six-megawatt fuel project from them. In addition, the company has collaborated with SK Engineering and helped to build two clean energy facilities in South Korea, both of which are powered by Hydrogen fuel cells. This shows that the company can continue to attract clients and investments from around the world.
In its most recent quarter, the company made a loss of $0.07 per share. This is an impressive improvement YoY as Q1 in 2020 saw a loss of $0.34 per share. Revenue came in at $194 million for the quarter, up 23% YoY. Bloom Energy has stated that it is on track to change into a company that produces upwards of $1 billion in revenue per year.
Bloom has managed to continuously increase its top-line, however, it is only in this recent quarter that the bottom line is seeing real marked improvements. Bloom has generated a loss each year as it is forced to spend heavily on research and development. Although this will eventually reduce the overall cost of its systems, it could be a long-drawn-out process before real profits are seen.
Both of these companies are worthwhile investments, although they are not suitable for risk-averse investors. Both of them have technology that is still in the early stages of wider acceptance meaning costs are going to remain high, preventing bottom-lines from improving. This will be frustrating for many investors and as such the share prices of both could experience volatility in the future.
However, of the two, Plug Power is more on track to make waves in the alternative energy market, particularly as it moves towards expanding in the bus industry. Plug Power is the better investment right now.
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