Update: Plug Power Executes $20 Million Deal - The Stock Is An Investment Once Again

| About: Plug Power, (PLUG)
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Summary

PLUG has signed a multi-year contract for its ReliOn integrated fuel cell solution and GenFuel hydrogen services to be used with a major North American telecommunications provider.

I argued PLUG could deliver some strong returns, as it was seeking new deals for its GenKey package deal. However, I did not predict this $20 million ReliOn deal.

This deal is very bullish, in my opinion, and I maintain a buy recommendation.

Plug Power (NASDAQ:PLUG) has announced it has signed another pivotal deal that impacts my thesis, which you need to be aware of. PLUG has now signed a multi-year contract for its ReliOn integrated fuel cell solution and GenFuel hydrogen services to be used with a major North American telecommunications provider. This is huge. The contract is valued at $20 million. So what will this deal encompass? Well, PLUG is going to provide ReliOn integrated backup power fuel cell solutions for use in the customer's wireless network, which supports internal communication needs and provides a public communications network for customers. Recall that ReliOn supplements batteries and replaces generators used for backup power applications. It is a highly reliable, clean, cost-effective grid and backup power system that enables rapid deployment at a lower total cost. Through this contract, PLUG will support as many as 500 new sites utilizing ReliOn.

When I last opined on PLUG, I said that the company could deliver some strong returns, as it was seeking new deals for its GenKey package deal. However, I did not predict that it would execute a contract valued at $20 million for its ReliOn system.

This deal is very bullish, in my opinion. It goes to show that PLUG is the real deal and is once again an investable company, despite an awful track record over the last decade. This deal with PLUG providing ReliOn integrated backup power fuel cell solutions for use in this customer's wireless network may open the floodgate in future quarters for more deals, provided this support is maintained without a hitch. The ReliOn integrated solution includes fuel cell systems and bulk refillable hydrogen storage, DC plant rectifiers and distribution, battery technology and space for radio equipment, all in a surprising environmentally friendly and resistant packaging. The product is clean and reduces the company's energy footprint, which is a major initiative of many businesses. While the upfront costs to businesses, much like the GenKey package, can be high, over time it is more cost-efficient than traditional systems. Further, during a power outage, this system will ensure customers have no downtime in their communications. I believe this contract may be the first of many for the ReliOn system in the coming quarters. I remain bullish on the company, despite the recent decline in shares since earnings a few weeks ago and the decline in oil prices.

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