Plug Power PLUG Stock News

Plug Power Inc (NASDAQ: PLUG) is rocketing in the market early on today, trading on gains of well over 7%. The gains come after the company announced that it received a large order from a fortune 100 customer. Here’s what’s going on:

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PLUG Announces The Receipt Of A $172 Million Order

In a press release issued early this morning, Plug Power announced that it received an order from a Fortune 100 customer at the close of 2019. In the release, the company said that the order surrounded hydrogen fuel cell deployments across a distribution network over the course of the next two years.

The contract that is centered around the order comes with a value of more than $172 million. Under the terms of the agreement, PLUG will provide its GenDrive fuel cell power, GenFuel hydrogen fuel, storage and dispensing infrastructure, and GenCare aftermarket service and support.

In a statement, Andy Marsh, CEO at PLUG, had the following to offer:

The material handling industry remains our core growth market in the near-term. This sizable contract signifies continual market validation to customer’s rapidly moving material handling business thus far. We commend this customer for its leadership in hydrogen and fuel cell adoption throughout the logistics business. Coupling this growth with already unfolding market expansion in stationary power and on-road electric vehicles well positions Plug Power to achieve our $1B gross billing goal for 2024.

Why The News Is So Important

The new contract is important for very clear reasons. First off, it will drive more than $174 million in funding through the door over the next two years, helping to support the growth of Plug Power as the hydrogen fuel cell industry continues to emerge. However, looking at the market as a whole and the company’s goals makes this even more exciting.

At the moment, the global market for material handling sits at a value of around $30 billion. In the release, PLUG said that its turnkey hydrogen and fuel cell solutiones are attractive in high utilization environments, where they have a distinct advantage compared to batteries.

In fact, hydrogen fuel cells are currently being adopted as a way to increase productivity, lower operational costs, and reduce greenhouse gas emissions. PLUG touts that its customers have reported a 15% productivity increase and a savings per year of more than $1 million in sites with about 200 forklift trucks.

In particular, the company said that expansion with material handling customers like the one announced today, combined with the development of sales channels and continued growth in European markets should help the company reach $1 billion in annual gross billings by the year 2024.

To date, PLUG has deployed more than 30,000 fuel cell units into commercial applications. Moreover, the company has developed more than 80 hydrogen stations and is the largest global user of liquid nitrogen.

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