Shares of Plug Power Inc. (PLUG) are trading down more than 72% year to date (YTD) at a price of $1.22 per share. The Latham, N.Y.-based alternative-energy solutions company has experienced a rough year due a variety of factors, including weaker-than-expected earnings and uncertainty regarding the surprise election of Donald Trump as president.

Investors Back Off

Plug Power’s shares took a dive after the firm’s most recent third-quarter earnings report at the end of November, which disappointed investors, missing the Street’s earnings target by just $0.02 on a per-share basis at $0.07 per share on revenues of $17.6 million. On the brighter side, Plug Power posted gross margins related to services up from negative 55% last year to 5.9% in the most recent quarter.

Investors backed away from Plug Power, along with other renewable-energy providers in the solar and wind industries due to the election of Trump, who vocally supports oil and gas and other traditional, more polluting industries over alterative energy. The administration has promised to “bring back” coal and has called climate change “a hoax.” In light of this instability, long-term investors have stayed loyal to the alternative-energy sector, foreseeing an inevitable global shift to renewable energy.

What’s Ahead for Next Year

Moving into 2017, Plug Power is optimistic regarding growth in the Chinese market, and improved margins overall. CEO Andy Marsh took various trips to China in 2016, resulting in a few deals in the region including a partnership with two Chinese auto partners to build fuel-cell-powered vehicles. Marsh views China as Plug Power’s key for sustainable growth, saying the country has invested more than $100 billion in the fuel-cell industry to date. Further, management foresees GAAP​ gross margins growing from 1.8% this year to 8% at the midpoint in fiscal year 2016 and further improving next year. (See also: Plug Power Looks to China for Growth.)

In December, Plug Power filed an 8-K form indicating it is in talks to acquire an unnamed European industrial gas company in order to bolster its share of target markets outside of the $40 billion addressable global material handling industry. (See also: Plug Power in Talks to Buy European Gas Company.)

 

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