The financial performance of Plug Power (PLUG), which provides many solutions related to hydrogen fuel, is improving significantly, and the firm expects to generate positive earnings before interest, taxes, depreciation and amortization (EBITDA) in the fourth quarter of this year. Consequently, it appears that the company is steadily progressing towards profitability.
Further, PLUG has many strong, positive catalysts in the near-to-medium term, including EU hydrogen mandates and a U.S. tax credit instituted by the 2025 Republican spending plan known as the Big Beautiful Bill. And over the longer term, PLUG can benefit tremendously from greatly increased usage of hydrogen by large commercial vehicles and drones, along with the utilization of its hydrogen by NASA.
Given all of the points outlined above, along with the attractive valuation of PLUG stock, the company’s shares could very well produce huge profits for investors over the long term.
Why Plug Power’s Financials Are Improving
Last quarter, PLUG’s revenue jumped 17.6% versus the same period a year earlier to $225.2 million. What’s more, its gross margin vastly improved to 2.4% of its sales, versus a gross margin loss of -122.5% in Q4 of 2024.
In addition to Plug Power’s significant cost cutting, the success of two of its largest businesses– electrolyzers and material-handling products — have contributed a great deal to its resurgence.
In 2025, the company revenue from electrolyzers, which are used to produce green hydrogen, rose to $187.8 million, versus $135.5 million in 2024. The company estimates that its potential revenue from electrolyzer deals, based on preliminary agreements that it has reached, is about $8 billion.
And Plug’s combined revenue from the sales of fuel cell systems and services on those “systems and related infrastructure” jumped to about $148.4 million, up from approximately $104.28 million in 2024. The company’s material handling products are fuel cell systems.
Also boding well for Plug’s outlook is its forecast for its revenue in 2026 to increase by a level similar to the 13% growth that it generated in 2025. Further, PLUG predicts that it will generate positive EBITDA in Q4 and noted that it may also produce positive cash flow in Q4. Finally, the firm plans to report positive operating income in 2027 before becoming profitable overall in 2028.
Near-to-Medium-Term Positive Catalysts
The EU is requiring that 42% of the hydrogen used by industrial firms be green by 2030, and the bloc is forcing transportation entities to utilize green hydrogen for 1% of their energy needs by 2030. These mandates are already significantly boosting Plug’s electrolyzer business, and PLUG CEO Jose Luis Crespo, speaking on the company’s Q4 earnings call, said “We estimate that meeting European mandates just for transportation could require 4 to 6 gigawatts of electrolyzer capacity by 2030, and we intend to compete for a meaningful portion of that opportunity.”
In the U.S., the Republicans’ budget reinstated a 30% investment tax credit that Plug’s customers are utilizing to reduce the cost of its products. Also helping to boost the firm’s material-handling revenue is the desire by many companies to reduce their electricity usage, noted Crespo, who indicated that he expects the firm to recruit new, “multisite” material-handling customers “in 2026 and beyond.”
Potential Long-Term Positive Catalysts
According to ZeroAvia, which develops hydrogen fuel cells for aircraft, drones powered by hydrogen fuel cells can fly longer distances and be refueled faster than their battery-powered peers. Moreover, drones that utilize fuel cells are harder to detect and cheaper to maintain and operate, ZeroAvia reported. As a consequence of these points, I expect militaries to begin utilizing fuel cells to power many of their drones over the long term.
And as I pointed out in a previous column, PLUG obtained a small deal to provide hydrogen fuel to NASA. As the amount of government-sponsored space travel jumps in the longer term, PLUG is well-positioned to sell a meaningful amount of hydrogen for relatively high prices to NASA and other governmental entities.
Turning to large commercial vehicles, Korean research firm SNE Research predicts that the number of hydrogen fuel cell vehicles globally will surge from just 16,000 in 2025 to 150,000 by 2030 and 3 million by 2040, with the growth likely to be led by “hydrogen trucks and buses.” All of those vehicles will need to be fuelled, and Plug’s hydrogen fuel and hydrogen-fueling infrastructure can help carry out that mission.
Is Plug Power Stock a Good Investment?
Despite Plug’s many positive catalysts and its viable path to profitability, PLUG is changing hands at a relatively low trailing price-sales ratio of 3.4 times. However, the firm’s current lack of profits and focus on emerging products make its shares somewhat risky. As a result, I believe that PLUG stock is best suited for growth investors with a relatively high risk tolerance.
KEY TAKEAWAYS
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Plug Power’s financials are improving. Revenue rose 17.6% year-over-year last quarter, while gross margins turned positive after steep losses in 2024.
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Profitability may be approaching. The company expects to generate positive EBITDA and possibly positive cash flow in the fourth quarter, with operating income projected by 2027.
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Policy support is creating near-term demand. EU mandates for green hydrogen and a reinstated U.S. investment tax credit are helping boost demand for Plug’s electrolyzers and fuel cell systems.
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Multiple long-term growth markets exist. Hydrogen adoption in drones, commercial vehicles, and space programs could significantly expand future demand.
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The stock still carries risk. Plug Power remains unprofitable today, but its improving fundamentals and relatively low valuation could make it attractive for growth investors with higher risk tolerance.
*This article is intended to be informational only; it is not financial advice.
