Plug Power stock has been very profitable for some companies, but the long-term outlook is surprising.
plug power (plug -5.25%) Stock prices have been like a roller coaster. Over the past five years, his stock price has soared more than 2,400%. In other cases, the value of stocks has fallen by 90%.
If you had bought $500 of Plug Power stock five years ago and held onto it, how much money would you have today?
Plug power as an investment
Plug Power is a hydrogen stock. Currently, the demand for hydrogen fuel is quite low, but with the demand for renewable energy rapidly increasing, hydrogen fuel could become a mainstay of the global economy in the coming decades.
This potential outcome remains remote, and the market has experienced a harsh boom-bust cycle for Plug Power stock based on fluctuating expectations about where hydrogen fuel demand will ultimately go. For example, in 2020 and 2021, investor interest in renewable energy stocks skyrocketed and governments received large sums such as $278 billion earmarked for new spending on renewable energy projects under the Inflation Control Act. Backed by investment. Plug Power’s management has been quick to raise its sales outlook, telling the market it now expects sales of $1.7 billion by 2024, up from previously expected sales of $1.2 billion.
The target soon proved overly aggressive. For example, last year’s revenue was just $891 million. Meanwhile, the technology faces fierce competition. Financially, the company is struggling to remain solvent. It appears to be relying on government loans to survive, with the U.S. Department of Energy announcing this week that it is pursuing a $1.66 billion loan.
PLUG Total Return Level Data by YCharts
After going through this boom and bust cycle, how much is your $500 investment worth today? In five years, you’ll only have $732 left.investment in S&P500 For comparison, the index increases by $500 to about $1,000. Plug Power is a highly volatile stock with great expectations. But so far, long-term shareholders have been left carrying a heavy burden.
Ryan Vanzo has no position in any stocks mentioned. The Motley Fool has no position in any stocks mentioned. The Motley Fool has a disclosure policy.
