Plug Power (PLUG -5.17%) will release its quarterly report on Thursday, and the fuel-cell company has been at the center of a huge debate recently. Bullish investors have pointed to recent deals that Plug has made, lifting both its shares and those of fuel-cell peers Ballard Power Systems (BLDP -2.23%) and FuelCell Energy (FCEL -5.01%). But skeptics argue that the company still isn't profitable and faces significant challenges to reach its full potential.

The idea of hydrogen-powered fuel cells has been around for years, and longtime Plug Power investors have seen their share of past booms and busts in the stock price. Since 2000, though, the prevailing trend for the stock has been down, as promising developments have always been followed by disappointments. With the new opportunity to work with Wal-Mart to use more of its mobile fuel-cell systems to help power some of the retailer's distribution centers, can Plug Power finally give investors what they've waited to see for so long? Let's take an early look at what's been happening with Plug Power over the past quarter and what we're likely to see in its report.

Source: Plug Power.

Stats on Plug Power

Analyst EPS Estimate


Year-Ago EPS


Revenue Estimate

$7.45 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can Plug Power earnings climb into the black?
In recent months, analysts have had mixed views on Plug Power earnings, widening their fourth-quarter loss estimates by a penny per share but narrowing full-year 2014 loss projections by $0.06 per share. The stock has been on fire, soaring 375% since early December.

Plug Power's third-quarter results show some of the frustration that investors have had with the fuel-cell company in the past. Despite highlighting a rising trend in order bookings, Plug's revenue fell 4% from the year-ago quarter, and the number of units shipped dropped by 17% to 155 units. Net loss grew by 55% in overall terms, although loss per share narrowed to $0.19 on a diluted basis due largely to issuance of stock and warrants.

Yet since then, Plug Power has delivered an onslaught of encouraging predictions and business wins. In December, the company said it expected orders for the fourth quarter to rise to $30 million to $40 million. A month later, Plug Power not only confirmed those expectations but extended them to what it saw as even larger order activity for the first quarter of 2014.

What has really caught investors' eye about Plug Power are the names of new customers. The company this year started a test program with FedEx to use its fuel cells to roughly double the range of electric delivery trucks, through a $3 million program funded by the Department of Energy. Then earlier this month, Plug Power revealed that Wal-Mart would expand the use of its fuel-cell technology, tripling the number of distribution centers using Plug Power products to nine. That lifted shares of Plug Power and partner Ballard Power Systems, which is a key supplier for Plug. FuelCell Energy stock also jumped on general optimism about fuel-cell technology, even though FuelCell Energy's systems aren't directly competitive with those of Plug Power and Ballard because they use different technology.

Just yesterday, though, Plug Power got a more skeptical assessment from Citron Research. Pointing to the stock's long-term decay and a history of unrealized potential, Citron concluded that the latest share-price surge will only lead to one more disappointment for investors. Yet with Plug Power CEO Andy Marsh having said at a recent conference that supermarket chain Kroger will be its next large customer after Wal-Mart, bullish investors still have reason to be optimistic.

In the Plug Power earnings report, investors need to do one simple thing: look to see whether the company's positive statements actually show up in its financial results. If rising order volume actually translates to growing revenue and eventual profitability for Plug Power, then the recent share-price gains could be justified. If not, Plug Power could see its stock fall further after yesterday's declines.

Click here to add Plug Power to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.