Shares of Plug Power (PLUG +0.00%) surged over 10% this morning before stabilizing as the day progressed. As of 1:15 p.m. Tuesday, the hydrogen stock was trading 4% higher.
Investors and analysts alike believe Plug Power's latest earnings report signals a turnaround.
Image source: Getty Images.
The numbers powering up Plug Power stock
Plug Power released its first-quarter numbers after market close on May 11. Expectations were running high after the company delivered its first-ever gross profit last quarter. Plug Power didn't disappoint.
While the company still reported a gross loss, the trajectory is undeniable: gross margins swung from a staggering negative 55% in Q1 2025 to negative 13% in Q1 2026. Two straight quarters of dramatic improvement prove that Plug is finally finding its footing.
Plug Power's revenue jumped 22% year over year, propelled by higher volumes in both its material handling and electrolyzer businesses. The sales growth and better cost control drove margins higher, but the real secret sauce is Plug Power's move to vertically integrate, which seems to be finally paying off. By producing green hydrogen in-house and reducing third-party purchases, the fuel margin rate improved significantly.
NASDAQ: PLUG
Key Data Points
Analysts are taking note of Plug Power with renewed optimism after its latest earnings report, raising their price targets today. Analysts from Craig -Hallum, for instance, lifted their target to $5 per share from $4 per share, while analysts from B. Riley increased their price objective to $5 from $3 per share. The stock closed Monday's trade at $3.52 per share.
The biggest reason Plug Power stock could rise further
By delivering better margins yet again, Plug Power is forcing investors to reconsider their skepticism. The company is still far from profitability. In fact, its net loss still rose sharply in Q1, largely because of non-cash accounting charges such as higher fair value of convertible debt.
Yet, if Plug Power continues improving margins and achieves its target of turning earnings before interest, taxes, depreciation, amortization, and stock-based compensation (EBITDAS) positive by Q4 2026, the stock could head much higher.
