Plug Power Looks Like a Bargain on the Surface. Here's What Investors Should Know.
Key Points
Plug Power’s stock has soared over the past year.
It still looks like a bargain relative to its long-term growth potential.
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Plug Power (NASDAQ: PLUG), a developer of hydrogen charging technologies, trades at just over five times this year's sales. Yet analysts expect its revenue to grow at a 17% CAGR from 2025 to 2028, with its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) turning positive in the final year. Its stock would also need to more than double to reach Wall Street's highest price target of $7.00 -- which Craig-Hallum's Eric Stine set earlier this year.
Therefore, the bulls might argue that Plug Power's stock -- which has already rallied nearly 260% over the past 12 months -- still looks like a bargain in this choppy market. However, investors should keep a few things in mind before hopping aboard the bandwagon.
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Image source: Getty Images.
Plug Power is finally growing again
When Plug Power went public in 1999, it planned to build hydrogen charging systems for entire homes. However, high expenses, regulatory issues, and weak demand derailed that strategy.
The company subsequently pivoted to selling hydrogen fuel cells, electrolyzers, and storage systems. It eventually secured Amazon and Walmart as its top customers (and leading investors via their stock warrants). Both retail giants use Plug's fuel cells and charging systems for their hydrogen-powered forklifts at their warehouses.
By the end of 2025, it had deployed over 74,000 fuel cell systems worldwide. That's up from about 50,000 systems at the end of 2021. Most of that growth spurt occurred in 2022 and 2023, and was amplified by its acquisitions of two smaller cryogenic storage companies.
|
Metric |
2022 |
2023 |
2024 |
2025 |
|---|---|---|---|---|
|
Revenue |
$701 million |
$891 million |
$629 million |
$710 million |
|
Growth (YOY) |
40% |
27% |
(29%) |
13% |
|
Operating Margin |
(97%) |
(151%) |
(321%) |
(207%) |
|
Net Income (Loss) |
($724 million) |
($1.37 billion) |
($2.10 billion) |
($1.69 billion) |
Data source: Plug Power. YOY = Year-over-year.
In 2024, Plug suffered a severe slowdown as it lapped those acquisitions, and the macro headwinds drove many companies to suspend their hydrogen projects. But in 2025, its revenue rose again amid fresh demand for green hydrogen and new hydrogen charging projects.
Will Plug Power's stock keep rising?
According to Grand View Research, the green hydrogen market could expand at a 30.2% CAGR from 2026 to 2033 across the industrial, transportation, and power generation sectors. If Plug matches analysts' estimates this year and matches the market's growth rate, its annual revenue could rise more than sixfold from $802 million in 2026 to $5.1 billion in 2033.
To meet that demand, it's producing more green hydrogen in Texas and Georgia and building a new hydrogen liquefaction plant in Louisiana through a joint venture with Olin (NYSE: OLN). It's also streamlining its business and cutting costs with its "Project Quantum Leap" initiative.
While Plug Power is still a speculative stock, I believe it looks undervalued relative to its growth potential. Investors who nibble on it today could be well-rewarded in a few years.
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Leo Sun has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.
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