The hydrogen industry is promising a future that will help reduce carbon emissions and offer ideal solutions for energy supply. This has led to a high demand for hydrogen stocks and several companies have become key players.
While they do get to enjoy an early mover advantage, there is also a lot of uncertainty surrounding them. The industry is in its infancy and companies are looking for better ways to produce hydrogen. With countries aiming to reduce carbon emissions, we will see a surge in the demand and this is where these three companies are set to benefit. Here are the most undervalued hydrogen stocks to buy this month.
Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) has been in the news for several reasons. Besides bagging several supply deals for electrolyzers recently, the stock has seen a steady fall. Many believed that the stock had bottomed, but then it slumped even further. When it comes to business, the company has been on a roll and has been making big moves in the industry. However, the financials didn’t reflect the same and this led to massive investor disappointment.
The company reported a revenue of $260 million in the recent quarter, up 72% year-over-year (YOY) and it aims to hit a revenue of $1.3 billion for the year. While the revenue numbers are impressive, its gross loss is soaring. The company reported a loss of $78 million and it burnt cash worth $625 million in the first half of 2023.
Yes, the company is far from profitability but there is no doubt that the future of the company remains bright. The company is spending money on commissioning new plants and once they are ready, it will start reporting better numbers. Its expenses are surging due to this but it is a one-time investment that will continue to generate returns for many years to come.
Once the new plants start producing, the margins could significantly improve and we could see the stock moving higher. The revenue is steadily rising and while the profits do look further away, there is high growth potential and the latest deals make it a noteworthy stock to own. Down 31% year-to-date (YTD), PLUG stock could see better days ahead very soon.
The world’s largest industrial gas company, Linde (NYSE:LIN) has carved a niche for itself in the industry. Several catalysts are working in favor of the company which is why it should be on your radar. Linde reported strong financial results in the second quarter and reported sales of $8.2 billion and an EPS of $3.57. It managed to beat expectations and has also increased the full-year EPS guidance to $14, which will reflect about 12% to 14% of growth YOY.
LIN stock is up 22% YTD, and is moving closer to the 52-week high of $393. The company’s history and balance sheet are proof that investors are putting their money in the right place.
It has also announced two important agreements in Brazil for renewable energy supply. This will allow the company to secure a huge amount of megawatt hours each year of renewable energy. Linde is also supplying to world’s first hydrogen ferry and has an agreement with Exxon Mobil for the use of carbon dioxide at its new production unit in Texas.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) is a company that specializes in fuel cell technology and is one of the most undervalued hydrogen stocks to consider. The company reported a revenue of $301 million in the recent quarter, an impressive 23.8% YOY increase. It has moved from a negative gross margin in 2022 to positive in 2023 which is very impressive.
BE stock is down 19% YTD and is trading much lower than the 52-week high of $26. This means there is ample upside potential from the current level. The biggest advantage of investing in Bloom Energy is the possibility of deploying its technology across multiple industries and this can build a solid stream of revenue for the business.
The demand for hydrogen is only going to rise and Bloom Energy will have an advantage here. It is expanding across Europe and also signed its first customer in Germany. With Bloom Energy, there is no looking back. This stock could double in the coming months.
On the date of publication, Vandita Jadeja did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.