Shares of hydrogen fuel-cell and electrolyzer company Plug Power (PLUG +1.34%) have collapsed nearly 99% from their split-adjusted all-time high near $1,500. The dramatic share price erosion reflects years of unprofitability, heavy cash burn, and repeated equity dilution.
Plug Power, however, is no longer in free fall. It is up 87% so far this year and appears to be stabilizing. Here's why it is not a dead investment, despite elevated risks.
NASDAQ: PLUG
Key Data Points
Growth catalysts
Plug Power delivered better-than-expected third-quarter results in early November, reporting revenue of $177 million and a loss per share of $0.12, both surpassing analyst estimates. The company reported nearly 53% sequential improvement in operational cash burn to around $90 million for the third quarter, driven by improved pricing, execution, and working capital management.
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The electrolyzer business -- electrolyzers split water into hydrogen and oxygen -- is also showing meaningful traction. The GenEco electrolyzer business saw revenues grow 46% sequentially to $65 million in the third quarter. Management expects electrolyzer business revenue to be approximately $200 million in 2025, representing a 33% increase year over year. The electrolyzer business has a solid pipeline of 230 megawatts of ongoing programs in North America, Australia, and Europe.
Risks
Although Plug Power's management is targeting breakeven gross margin exiting 2025, achieving this goal depends on higher equipment sales, continued service margin expansion, and lower hydrogen fuel costs. The company is also exposed to project timing risks. Power Plug has an electrolyzer opportunity funnel of $8 billion, but many of these projects haven't yet reached the final investment decision. The company has also acknowledged challenges at its manufacturing plants.
Finally, the $275 million liquidity boost expected from an initiative to monetize the company's electricity rights in partnership with a U.S. data center developer in New York and another location has not yet closed.
Hence, it is evident that while Plug Power is not totally on the brink of collapse, it is still far away from a confirmed turnaround. So it may be better for investors to wait on the sidelines and track the company's quarterly progress before committing capital to this stock.
