Investing in companies involved in the hydrogen industry could potentially offer significant growth opportunities for investors. The shift towards clean energy and the increasing demand for sustainable solutions are driving factors. These could propel the hydrogen sector forward in the coming years.
Hydrogen is a clean-burning fuel that produces only water as a byproduct, making it an attractive alternative to fossil fuels. My thesis is that as the climate crisis continues to increase in urgency, that these multibagger hydrogen stocks will see their fundamentals and valuations improve as a result.
So with that being said, here are three multibagger hydrogen stocks that investors should consider for their portfolios in April. I believe that now is the best time to scoop up shares in these promising, but speculative companies.
Multibagger Hydrogen Stocks: Plug Power (PLUG)
Plug Power (NASDAQ:PLUG) is involved in the hydrogen fuel cell technology sector. The company provides solutions for electric vehicles and stationary power markets.
The company plans to deploy between 300MW and 400MW of electrolyzers in Europe, targeting competitive hydrogen production costs €‹. Additionally, PLUG has completed various large-scale engineering projects. These projects include a 100MW electrolyzer project for GALP. It is progressing with nearly 1GW in Basic Engineering Design Package (BEDP) for other projects.
In terms of financial performance, PLUG reported a record revenue of $891 million for the year ended December 31, 2023. This marked a 27% growth from the previous year. Despite this growth, the company faced a significant increase in its EPS loss to $2.30. This was up from a loss of $1.25 in the previous year.
PLUG recently faced some skepticism around its ability to remain as a going concern, but it has since made efforts to shrug those fears off. This was due to its high rate of cash burn and worries around its ability to raise future capital.
PLUG then has the inherent risk profile to be a multibagger due to its low valuation and market cap.
Bloom Energy (BE)
Bloom Energy (NYSE:BE) designs and manufactures solid oxide fuel cells that produce electricity on-site. Known for its Bloom Energy Server, the company leverages technology that converts natural gas and hydrogen into electricity with minimal emissions.
For 2024, BE projects revenue between $1.4 billion and $1.6 billion with a focus on enhancing profitability. This outlook is supported by a strategic plan targeting high-growth areas like greenfield data centers and international markets. The company anticipates its revenue and profits to be stronger in the second half of the year, as noted during its recent earnings call.
In 2023, BE achieved a record revenue of $1.33 billion, representing an 11.2% increase from the previous year. This growth was driven largely by consistent sales of its energy servers and services €‹. However, the fourth quarter of 2023 saw a revenue dip to $356.9 million, down 22.8% year-over-year.
BE stock has a better risk profile than PLUG in my view, but this is balanced with its higher valuation. It could then be a solid choice for a more conservative investor.
Ballard Power Systems (BLDP)
Ballard Power Systems (NASDAQ:BLDP) is a leader in hydrogen fuel cell solutions, notably involved in the Hydrogen Locomotive Program in partnership with Canadian Pacific (NYSE:CP).
For this year, the company expects revenue distribution to be back-half weighted, similar to 2023, with about 30% in the first half and 70% in the second half of the year. BLDP’s total operating expenses are forecasted to range from $145 million to $165 million, and capital expenditures are projected between $50 million and $70 million €‹.
BLDP’s financial performance in 2023 featured a 25% year-over-year increase in revenue, achieving significant growth in the bus, rail, and marine verticals, with rail revenue nearly quadrupling from the previous year. The company ended the year with a $130.5 million order backlog.
BLDP’s performance I think underscores the potential of the hydrogen industry in general, with it being unable to fulfill its backlog. It could then be one of those stocks to consider for potentially multi-bagger returns.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.