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Uncertainty often means opportunity, especially with speculative growth stocks. That’s the argument many investors bullish on Plug Power (NASDAQ:PLUG) may be making. Since 2021, there have been increasing doubts that the bull case for PLUG stock will play out.

That’s why you can buy shares in this hydrogen energy company for just $8.86 per share today, versus prices topping $75 per share back in January 2021.

Per those very enthusiastic about this stock, if the company can prove the skeptics wrong, and deliver results in line with long-term projections, there is massive upside relative to present price levels.

Yet while investors are free to enter positions today, there may still be a way to exercise caution, without “missing out” on Plug Power, in the event a comeback takes shape. Let’s take a closer look and see why this is the better approach.

PLUG Plug Power $8.70

The Reasoning Behind PLUG Stock’s Bargain Appeal

Trading in the single-digits, Plug Power may be low-priced, but based on its current financials, it’s hard to make the argument that PLUG is good value in the classical sense of the term “value stock.”

However, to those holding PLUG stock as a long-term position, it’s a bona fide bargain. At least, compared to the aforementioned projections. According to the company’s most recent investor presentation, management is targeting $5 billion in annual sales, with operating margins of 17%, by 2026.

Management is also targeting $20 billion in sales, at a 20% margin, by 2030. Compare that to Plug Power’s current market cap of around $5.3 billion. It’s clear that, in the event it merely comes close to hitting these projections, shares would undoubtedly rise to levels many times over today’s prices.

Still, there’s a reason why PLUG trades at such a high discount to these lofty projections. Government incentives from the U.S., the E.U., and other jurisdictions could spur a big jump in demand for “green hydrogen,” or hydrogen produced without fossil fuels.

It remains unclear if/when such factors will cause big operational improvements for Plug Power.

Don’t Expect an Immediate Liftoff

A potential “green hydrogen” boom could cause this company achieving the scale necessary to become consistently profitable. Resulting in big gains for PLUG stock between now and the end of the decade. That said, it’s not as if shares are going to spike back to past highs due to a single game-changing event.

Mainly, because uncertainties holding down Plug Power shares still need to ease. For instance, even as legislation like last year’s Inflation Reduction Act may provide substantial tax credits to spur “green hydrogen” production and use, the details regarding these tax credits are still being worked out.

In addition, Plug Power cannot generate $5 billion, much less $20 billion, in annual revenue from its existing infrastructure. The company needs billions in capital to build out production capacity. Yet as KeyBanc’s Sophie Karp argued last month, obtaining this financing could prove difficult in today’s economic environment.

Plug may end up having to push back its projection, much like it has done in the past. In short, even assuming that “green hydrogen” becomes a major energy source, bullishness for this stock will return gradually, meaning there’s no rush to enter a position.

‘Wait and See’ is Your Best Move

It’s not only the two headwinds that I mentioned above that need to pass. Even if Plug Power obtains the tax credits and financing needed to scale up, enabling it to scale up into a multi-billion dollar enterprise, it will still need to show it can turn this massive revenue growth into high profitability.

As I’ve mentioned previously, Plug’s poor past performance makes it wise to be skeptical about its ability to hit ambitious profitability targets.

Again, the company needs to climb many hurdles, before the market renews the level of excitement for it last experienced over two years ago.

With this in mind, here’s the takeaway: ‘wait and see’ is your best move. It’s worth risking paying up for shares at a later time. By then, the bull case for PLUG stock could go from shaky to ironclad.

PLUG stock earns a D rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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