Plug Power Stock Looks Cheap, but is it a Buy Now?

Plug Power, a developer of hydrogen charging and storage technologies, has a market cap of $1.8 billion and trades at less than two times next year's sales. Despite its disappointing long-term investment, insiders have bought nearly 20 times as many shares as they sold over the past 12 months, indicating a potential inflection point. Plug faces near-term challenges, but its growth in warehouses and fulfillment centers, as well as a $1.66 billion loan guarantee from the U.S. Department of Energy, may drive its stock to higher valuations.

Plug Power Inc. (PLUG), a developer of hydrogen charging and storage technologies, has been a contentious investment for shareholders. With a market cap of $1.8 billion and trading at less than two times next year's sales, the company faces near-term challenges. However, insiders have been bullish, buying nearly 20 times as many shares as they sold over the past 12 months, indicating a potential inflection point.

Plug Power's journey has been tumultuous. The company went public in 1999 and has struggled to generate consistent profits. Despite this, the company has made significant strides in the hydrogen fuel cell market, deploying over 69,000 fuel cell systems and 250 fueling stations [1]. It has also secured a $1.66 billion loan guarantee from the U.S. Department of Energy, which could provide a significant boost to its operations.

The company reported progress in cost reductions and margin improvement in the second quarter of 2025. Revenue rose 21% year over year, driven by robust demand for its GenDrive fuel cells, GenFuel hydrogen infrastructure, and GenEco electrolyzer platform [2]. The company's gross margins improved from negative 92% to negative 31% during the same period, thanks to its Quantum Leap cost reduction program.

However, Plug Power still faces significant hurdles. The company has $336 million in cash on its balance sheet against $991 million in debt, and it has burned over $819 million in cash over the past four quarters. The company will need to raise additional funds to continue its growth, which could further dilute shareholders.

Despite these challenges, Plug Power's growth in warehouses and fulfillment centers, along with its strong market position, could drive its stock to higher valuations. The company's long-term potential in the hydrogen market, estimated to be worth $225 billion today and growing, is a significant factor to consider.

References:

[1] https://www.fool.com/investing/2025/08/24/is-plug-power-stock-a-millionaire-maker/
[2] https://www.nasdaq.com/articles/plug-power-cuts-costs-lift-margins-will-results-be-sustainable