What happened
Shares of fuel cell pioneer Plug Power (PLUG +4.95%) are having a strange day Wednesday. For that matter, the whole fuel cell industry is acting kind of weird.
Because if you haven't heard yet, investment bank KeyBanc Capital Markets just initiated coverage of all the big fuel cell stocks -- not just Plug Power, but peers FuelCell Energy, Ballard Power, and Bloom Energy, too -- and yet every single one of these stocks is down to some extent today, with Plug in particular taking a 2.9% loss as of 12:40 p.m. ET.
Now why might that be?
Image source: Getty Images.
So what
In KeyBanc's note this morning, the analyst has some hyper-optimistic prognostications for Plug and its peers. In 2022 alone for example, KeyBanc believes that fuel cell companies as a group will grow their revenue 20% to 80%, reports TheFly.com.
Furthermore, growth will be "sizable" over the entirety of this decade. According to KeyBanc, by 2030, the global fuel cell industry will reach $300 billion in size -- and to put that in context, if you add up all the revenue booked by Plug, FuelCell, Ballard, and Bloom over the past year, the total comes to just $1.1 billion.
Now what
Oh, and I should probably mention that just one of the four fuel cell companies named above represented nearly 82% of that total revenue -- and that fuel cell company was not Plug, but rather Bloom Energy. (In fact, Plug Power's $31.3 million in trailing-12-month revenue amounts to less than 3% of the total.)
So once again, why aren't investors bidding Plug stock up today, despite KeyBanc's setting an overweight rating on the stock?
If you ask me, the answer is that investors are looking at the analyst's predictions and finding them entirely unbelievable. They don't buy the idea that this $1 billion industry is going to grow nearly 300 times in size over the next eight years. And they don't think that Plug Power -- which currently has the smallest sliver of revenue of any of the four leading fuel cell companies -- is going to outperform the others.
Honestly, I cannot say I blame investors for having their doubts about that.
