In light of the deal Ballard Power Systems Inc. (USA) (NASDAQ:BLDP) just secured to acquire Synergy (Guangdong Nation Synergy Hydrogen Power Technology) by late 2016, Ballard Power will also be collecting at least $168M in revenue over a span of the next five years. With short-term looking bright, Roth Capital analyst Craig Irwin finds BLDP on track for a revenue breakeven point, reiterating a Buy rating with a price target of $2.00.
Irwin believes there will be immediate translatable revenue advantage with joint-venture company Synergy and its fuel cell stack acquisition; through membrane electrode assemblies (MEAs) as well as in tech transfer applications to provide fuel for cell buses/commercial vehicles in China. The specific location of China becomes significant in this context, as Irwin believes Chinese bus program potential to be consequential.
Once this deal is official, BLDP will gain the license to not only manufacture, but also sell these specific fuel cell stacks in China; meaning $18.4m as far as Technology Solutions revenue is concerned for the year 2017 and a starting point of $150m in MEAs. The deal totals at a $168m value- one that Irwin thinks will pay off.
With bumped up revenue waiting in the wings, Irwin contends with buses in Japan anticipating the 2020 Olympics and the fuel cell initiative of Korea, all systems are about to point to go for Ballard Power. Irwin asserts, “We see the announcement of this JV and supply relationship as lifting confidence that Ballard will meet 2017 forecasts, and believe this JV is likely to make a larger FY18 revenue contribution.”
As usual, we recommend taking analyst notes with a grain of salt. They often successfully move the stock price, but we advise always taking things into perspective. According to TipRanks, Craig Irwin is ranked #3,718 out of 4,057 analysts.
TipRanks analytics exhibit BLDP stock as a Buy. Out of 2 analysts polled in the last 3 months, 1 rates BLDP as a Buy and 1 maintains a Hold for shares. The average 12-month price target for the stock is $1.75, marking about an 11% upside from current levels.