Options Bulls Unfazed by PLUG Pullback

The equity still sports a 1,012% year-over-year lead, however

Deputy Editor
Mar 17, 2021 at 11:12 AM
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The shares of Plug Power Inc (NASDAQ:PLUG) are sinking alongside the broader tech sector this morning, last seen down 14.6% to trade at $36.45 amid news that the alternative energy name would restate its previously issued financial statements, due to several accounting errors related to non-cash items. Plug Power said the restatements will have no effect on cash positions or any of its business operations. 

Nevertheless, the security is getting hit with bear notes. Two analysts have already lowered their price targets, including Truist Securities, which dropped its price estimate to $42 from $65, and downgraded the equity to a "hold" from a "buy" rating. However, the majority of analysts are optimistic on PLUG. Of the 12 in coverage, all but two considered the stock a "buy" or better. Plus, the 12-month consensus price target of $63.83 is an astounding 73.7% premium to current levels. 

A look at today's trading shows calls are still outnumbering their bearish counterparts, with 84,000 of the former and 66,000 of the later exchanged so far -- three times the intraday average. New positions are being opened at the March 40 call -- which expires later this week -- and the April 45 call. Buyers of the former are betting on a rebound from the 2020 darling in the next two days.

Despite today's sharp pullback, the shares' 120-day moving average has so far contained the damage. The drop has lost steam at the site of PLUG's Jan. 6 bull gap, another potential layer of support. Year-over-year, the stock remains up an absurd 1,012%. 

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