This Hydrogen Stock's Turnaround Is Further Away Than Wall Street Thinks

Under new CEO Jose Luis Crespo, Plug Power (NASDAQ: PLUG) seems to be staging an impressive turnaround.

In 2025, under its former CEO, the popular hydrogen stock posted a massive $1.7 billion loss. Compare that figure to Plug Power's $3.2 billion market cap, and you can quickly appreciate the company's dire financial position.

Last quarter, however, Plug Power posted a loss of just $188 million, a run rate below $800 million per year. While not an obvious cause for celebration, narrowing losses suggest the company is headed in the right direction. Gross profit came in at negative $1.7 million, a sizable improvement to the $53.5 million gross loss posted the year prior.

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While unprofitable, Plug Power's management team claims roughly $2 billion in liquidity, though only $162 million is liquid cash, with another $672 million in restricted cash.

Rising sales of its GenEco hydrogen fuel systems, as well as rising hydrogen fuel sales thanks to a larger installed base, have Wall Street fairly bullish on the embattled stock. An average 12-month price target of $3.20 per share suggests roughly 40% in potential upside. Notably, two analysts recently reaffirmed their predictions, forecasting upside of 117% and 205%, respectively.

After a brief correction, Plug Power stock is roughly flat on the year despite the seeming turnaround. Should retail investors take advantage of the pullback? You may be surprised by the answer.

Here's what Wall Street gets wrong about Plug Power's turnaround

Plug Power's turnaround seems to have real legs. Revenue is rising by double digits due to strong demand for the company's GenEco hydrogen fuel systems. Earlier this year, Plug Power secured the largest order in its history: a 275-PEM electrolyzer system for Hy2gen, a Canadian conglomerate.

Rising demand has Wall Street excited not only about revenue growth potential but also about the prospect of reaching profitability. That would be huge, since Plug Power has yet to realize sustainable profits since its founding nearly three decades ago.

The issue with Plug Power as an investment doesn't strictly have to do with the company itself but with the industry it competes in. Many expert long-term forecasts of hydrogen demand have been cut in recent years for one simple reason: Hydrogen remains uneconomic relative to competing fuels such as natural gas, wind, and solar.

"We forecast the amount of hydrogen produced in 2050 will be 35% lower than we forecast in 2022. Clean hydrogen will see an even bigger decrease of 45%," one industry report concluded earlier this month. "Like most mainstream forecasters of the energy transition, the high cost of hydrogen and the lack of policy implementation have led us to revise our outlook."

Given this dynamic, Plug Power's end market demand will largely remain reliant on government subsidies and regulatory actions. In short, the company simply doesn't control its own future. So, while turnaround efforts are gaining traction, I remain leery that Plug Power will reach sustainable profits by the end of the decade.

Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.