Wall Street Has a New Favorite Hydrogen Investment

Five retired of 5 analysts complaint Hyzon Motors shares a Buy.

Courtesy Hyzon

Hyzon is moving to commercialize medium-duty and heavy-duty trucks that are powered by its hydrogen substance cells. Hydrogen doesn’t make immoderate c dioxide—the main state blamed for planetary warming—when burned oregon utilized successful a substance compartment to make electricity.

Producing hydrogen—the substance for the substance cell—can make greenhouse gases if its produced by splitting up earthy state molecules. But if energy from renewable powerfulness sources is utilized to marque hydrogen from h2o past nary greenhouse gases are emitted successful hydrogen accumulation oregon by the trucks.

Ives believes Hyzon has starring substance compartment technology, a bequest of the company’s narration with its genitor institution Horizon, a substance compartment shaper based successful Asia.

Ives besides believes Hyzon is up of the competition. The institution volition person astir 500 substance compartment trucks connected roads by the extremity of 2021. The remainder of the manufacture has, essentially, zero.

With the caller Buy rating, 5 retired of 5 analysts covering Hyzon banal complaint shares Buy. The mean terms people is much assertive than Ives’ astatine astir $20 a share. In fact, Ives has the lowest terms people astatine $10, but helium is inactive bullish.

Only 3 of nine, oregon 33%, of analysts covering Nikola (NKLA), different hydrogen-based exertion company, complaint shares Buy. About 65% of analysts complaint Plug Power (PLUG) stock Buy. And 60% of analysts complaint shares of Ballard Power Systems (BLDP) Buy. All 4 of these companies privation to commercialize hydrogen substance compartment exertion for commercialized conveyance markets.

For now, analysts similar Hyzon.

All 4 are valued based connected income and net acold down the road. Hydrogen exertion inactive isn’t being wide adopted. It’s costly comparative to accepted trucking powertrains. Nikola’s marketplace capitalization is astir $4 billion, Ballard’s is astir $4.7 billion. Plug’s is the astir invaluable of the 4 with a marketplace headdress of astir $15 billion. Hyzon’s marketplace headdress is the lowest astatine astir $1.8 billion.

Hyzon projects astir $3.3 cardinal successful income by 2025. What’s more, the institution believes it volition beryllium producing affirmative Ebitda, abbreviated for net earlier interest, taxes, depreciation and amortization, by 2023.

Hyzon completed its merger with a peculiar intent acquisition institution successful July. Since then, shares are down 33%. The S&P 500 and Dow Jones Industrial Average are up 3% and 2%, respectively, implicit the aforesaid span.

Write to Al Root at allen.root@dowjones.com