Plug Power (NASDAQ:PLUG) stock was off to a strong start back in January. However, sentiment changed dramatically starting in early February. This has resulted in a more than 50% price decline for PLUG stock in a little over two months.

During this time frame, this widely followed hydrogen stock has tumbled from above $18 per share, to prices just below $9 per share. After this drop, some bottom-fishing investors may believe shares are now at a “can’t miss” price.

After all, according to those laying out the bull case, Plug Power still has the potential to achieve a “liftoff moment,” resulting in a big jump in revenue, and swing to consistent profitability.

Yet despite this optimism held by some, there’s a good reason the market keeps abandoning this stock in droves. Let’s take a closer look at the root of PLUG’s plunge, and why it is likely to continue.

Why Investors Keep Pulling the Plug on PLUG Stock

Plug Power has come a long way from the lofty price level its shares attained during the height of the late 2020/early 2021 bubble among renewable energy stocks. Political changes in the United States spurred great excitement that the U.S. Federal Government would fast-track America’s move to fossil fuel alternatives.

As a result, investors briefly sent PLUG stock to prices topping $75 per share. Since then, however, it’s been a choppy trip back towards pre-“green wave” price levels. To most, this big price decline is because of investors souring on the renewable energy sector.

However, this sentiment shift, and the resultant deflating of the “green energy bubble,” isn’t the sole reason behind PLUG’s nearly-90% drop from its 10-year high.

Poor execution has been just as strong of a factor. Even as the world is far from fully moving away from fossil fuels, adoption of energy alternatives have grown substantially in recent years.

This is because of government mandates, as well as incentives provided by legislation like the Inflation Reduction Act. Yet despite the growing demand for its offering, Plug Power has thus failed to turn this into strong fiscal results.

The Bull Case is On Shaky Ground

Although PLUG stock has clearly fallen out of favor, some investors remain bullish on its long-term prospects. This isn’t out of any sort of ignorance. These bulls know the company continues to fall short of expectations, and have dialed back their expectations a little.

Still, these analysts/investors still believe that Plug Power can achieve its long-term revenue growth goals, as detailed in the company’s latest investor presentation. These entail hitting $5 billion in sales by 2026, with a 17% operating income margin, and hitting $10 billion by 2030, with a 20% operating income margin.

Yes, given PLUG’s current market cap ($5.34 billion), even moderately coming up short of this target could, in theory, result in a big recovery for the stock. However, there is plenty to suggest that hitting this revenue and profitability targets unlikely.

As two sell-side analysts have recently pointed out, the current economic environment may make it difficult for the company to obtain the financing needed to achieve this growth. Plug’s poor fiscal track record calls into question its ability to ultimately raise its margins to the 17%-20% range.

More Disappointment Ahead

Put simply, Plug Power appears more likely to continue missing on revenue estimates. The company also appears likely to keep reporting heavier-than-expected losses.

What remains of the bull camp for this stock will keep dwindling. Further poor financial performance will make it increasingly certain that Plug doesn’t come anywhere close to hitting its 2026 and 2030 revenue targets, much less its ambitious profitability targets for these years.

While down massively from its 2021 highs, PLUG may have ample room to drop from here. A full trip back to penny stock territory (under $5 per share), which this stock languished in for many years prior to 2020, may not be out of the question.

Barring a sudden improvement in its ability to effectively execute on its strategy, resist any urge to “plug” PLUG stock back into your portfolio.

PLUG stock earns a D rating in Portfolio Grader.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.