Can Plug Power's Expansion Into the Green Energy Sector Fuel Growth?

Plug Power Inc. PLUG has been focusing on expanding its business and investing in the green hydrogen energy market given its long-term growth potential. Going by some estimates, the green hydrogen energy market is anticipated to grow to $30 billion by 2030. The company looks forward to strengthening its position in the market with improved green hydrogen production capacity at its Georgia facility, as well as a new joint venture with chemical products company, Olin Corporation OLN in Louisiana.

With regard to this, in January 2025, PLUG secured $1.66 billion worth of loan guarantee from the U.S. Department of Energy (DOE) for the construction of six green hydrogen production plants. This will enable the company to significantly expand its domestic manufacturing and hydrogen production capabilities. Also, the Senate's revision of the U.S. government's proposed tax bill is expected to offer two-year tax credit extensions for the hydrogen industry. This will help Plug Power remain solvent as it aims to scale up its business.

However, PLUG has been grappling with a high cash burn rate and negative gross margins over the past several quarters. Despite these challenges, its investments in the lucrative green hydrogen market and the Quantum Leap project are expected to drive its performance in the long run.

Expansion in Clean Energy Space from PLUG’s Peers

Among Plug Power’s major peers, FuelCell Energy, Inc. FCEL, remains committed to investing in the development and commercialization of its solid oxide fuel cell platform. This includes strategic partnerships that will allow FuelCell Energy to deploy the technology in the energy, hydrogen generation and emissions reduction projects. Earlier this year, FCEL received a contract to build a 7.4 MW fuel cell power plant in Hartford, CT. The project is expected to add more than $160 million of future revenues to FuelCell Energy’s generation backlog.

Its another peer, Bloom Energy Corporation BE, stands to benefit from its expanding domestic and international commercial capability. In February 2025, Bloom Energy expanded its longstanding relationship with Equinix. Its fuel cells allow Equinix to generate on-site power at its data centers more sustainably than typical grid-delivered energy. The latest collaboration should further strengthen Bloom Energy’s position in the rapidly evolving renewable energy space.

The Zacks Rundown for PLUG

Plug Power’s shares have gained 75.5% in the past three months compared with the industry’s growth of 18.6%.

From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 3.45X against the industry average of 22.08X. PLUG carries a Value Score of F.

The Zacks Consensus Estimate for PLUG’s bottom line for 2025 has been stable in the past 60 days.

PLUG stock currently carries a Zacks Rank #3 (Hold).

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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