Bloomberg
Plug Power and FuelCell Boom Increase Specs of 2000 Bust
(Bloomberg) – Clean energy stocks have risen over the past year, raising alarm bells on Wall Street, deeming profits to be foaming – but this latest rally is nothing short of lightning-fast compared to the boom and bust caused by the sector at the beginning of the millennium. Plug Power Inc. and FuelCell Energy Inc. are just two examples of companies that have soared in the last twelve months, and have more than tenfold since March 2020, reflecting growing investor enthusiasm. for the fuel cells used in electric vehicles and power plants. Read more: Fuel Cell, Solar Stocks Surge on Covid Bill, Capping Banner Year Valuations are extended, with FuelCell’s enterprise value-to-sales ratio at 58 at for the current fiscal year. That compares with 5.9 for Apple Inc. and 13 for Tesla Inc., according to data compiled by Bloomberg. However, it is quite muted compared to the 113 EV sales ratio that hit FuelCell in 2000 or the 187 Ballard Power Systems Inc. reached the same year, amid an early version of today’s fuel cell depletion. according to some analysts. Investors who believe that valuations may rise higher may have an overview of the fact that the bubble ended badly amid product delays and a series of bankruptcies: “Investor euphoria has now reached new heights that bordering on mania, “the managing partners of Goehring & Rozencwajg Associates LLC a natural resource investment firm, wrote in a recent market commentary. “Extensive valuations leave investors vulnerable to any setback or delay in the transition to green energy.” The devices, which use natural gas or hydrogen to produce electricity, are becoming popular as a cleaner way to power offices, warehouses and data centers without relying on the electrical grid – a major selling point at a time when power outages in California and Texas plagued. .But the price of fuel cell stocks over the past year is based on the potential of the technology, not on current sales. Gohring & Rozencwajg warned that the industry could face the same fate two decades after its first upswing and refuge. The company is mainly investing in traditional energy and uranium and said it will consider clean energy if the future looks more promising. There have been recent signs of problems in the industry, with Plug Power declining last week after accounting errors and FuelCell declined. about income that missed estimates. Read more: Plug Power shaken by accounting errors after surge of 1,400% ‘A series of failed promises and bankruptcies plagued the battery industry a decade ago, making it nearly impossible for subsequent businesses to find financing and move forward to move. , ”They wrote. “We are concerned that it could occur on a much larger scale if ten trillion ‘green’ investments are eventually written off. (Add context in paragraphs 6-7) For more articles like this, please visit us at Bloomberg.com. Sign up now to stay ahead of the most trusted business news source. © 2021 Bloomberg LP