Plug Power vs. FuelCell Energy: Which Clean Energy Stock is a Stronger Pick?

Plug Power Inc. PLUG and FuelCell Energy, Inc. FCEL are both familiar names operating in the fuel cell technology market. As rivals, both companies are engaged in manufacturing innovative fuel cell product solutions and electrolysis platforms in the United States and abroad.

Both companies have been enjoying significant growth opportunities in the green hydrogen market on account of growing demand for clean energy solutions and government initiatives to decarbonize several sectors. Let’s take a closer look at their fundamentals, growth prospects and challenges.

The Case for Plug Power

Plug Power’s results have been showing signs of recovery of late. After witnessing growth of 11% in the first quarter, PLUG’s revenues increased 21% year over year in the second quarter. The revenues were driven by solid demand for its GenEco proton exchange membrane (PEM) electrolyzers across the industrial and energy sectors. In the second quarter, revenues from the electrolyzer product line surged approximately 200% on a year-over-year basis.

The company is expected to continue benefiting from strong electrolyzer demand in Europe, where government investments and faster project timelines are promoting the use of green hydrogen. In October 2025, Plug Power delivered a 10-megawatt (MW) GenEco electrolyzer to Galp’s Portugal-based Sines Refinery, which is one of Europe’s largest PEM hydrogen project. The company secured an order to install a total of 10 arrays of GenEco electrolyzers with Hydrogen Processing Units by early 2026.

Also, in June 2025, PLUG expanded its partnership with Allied Green Ammonia with a new two-gigawatt electrolyzer project in Uzbekistan. This deal builds on their existing three GW project in Australia and strengthens the company’s position as a leading provider of large-scale hydrogen solutions worldwide.

Plug Power remains focused on scaling up its business and investing in hydrogen plants, given the long-term growth potential of the green hydrogen energy market. PLUG intends to capitalize on the opportunity with increased green hydrogen production at its new plant in Georgia, as well as its joint venture with Olin Corporation OLN in Louisiana.

PLUG launched Project Quantum Leap to improve its margin, cash flow and reduce the cash burn rate. As part of the project, it expects to benefit from sales growth, pricing actions, better inventory and capex management, and increased leverage of its hydrogen production platform. PLUG expects the project to generate more than $200 million in annualized savings.

However, PLUG’s inability to generate positive gross margins and weak liquidity position might affect its profitability in the near term.

The Case for FuelCell Energy

FCEL has been benefiting from strong orders from its customers who need a 24/7 clean energy supply to efficiently run their operations. In July 2025, the company clinched an order from CGN-Yulchon to deliver eight advanced carbonate fuel cell modules and maintenance services at the latter’s Gwangyang facility. The seven-year deal, with an option of extending the initial term, will allow FuelCell Energy to expand its presence in one of the most advanced fuel cell markets in Asia.

Earlier this year, FCEL also 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. The backlog at the end of third-quarter fiscal 2025 (ended July 2025) was $1.24 billion, reflecting year-over-year growth of 4%.

FuelCell Energy’s strategic partnership with Inuverse, Diversied Energy and TESIAC Corp. is also expected to accelerate its entry into the data center market and expand its penetration in deployed microgrid applications.

FCEL remains well-poised to capitalize on the growing opportunities created by the increased power demand from data centers. The company expects to witness solid demand for its modular power block solutions, which are specially designed to cater to this growing demand across the data center market.

Also, the company implemented a restructuring program, particularly in the United States, Canada and Germany, in June. This initiative is helping it to lower operating costs, realign resources toward advancing the company’s core carbonate technologies and strengthen its position in the clean energy market.

Despite this, FCEL has been subject to high operating costs and negative gross margins, which are expected to hurt its near-term profitability.

How Does the Zacks Consensus Estimate Compare for PLUG & FCEL?

The Zacks Consensus Estimate for PLUG’s 2025 sales is $707.5 million, implying year-over-year growth of 12.5%. The consensus estimate for its bottom line is pegged at a loss of 62 cents per share.

The Zacks Consensus Estimate for FCEL’s fiscal 2025 (ending October 2025) sales is approximately $151 million, indicating growth of 34.7% year over year. Estimates for its bottom line are pegged at a loss of $7.59 per share.

Price Performance Comparison

In the past three months, Plug Power’s shares have surged 86.8%, while FuelCell Energy stock has gained 58.2%.

Valuation of PLUG & FCEL

From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 9.12X. In comparison, FuelCell Energy’s forward earnings multiple currently sits at a negative 2.21X.

Final Take

Plug Power’s strong foothold in the green hydrogen market, robust electrolyzer demand, strategic investments and partnerships are likely to drive its long-term performance. FuelCell Energy’s strength in the fuel cell market and solid backlog level position it for strong long-term growth.

Both the fuel cell companies, playing a crucial role in the global transition toward clean energy, currently carry a Zacks Rank #2 (Buy). This makes choosing one stock a difficult task. Considering their long-term prospects, revenue growth and margin improvements over the last few quarters, PLUG seems to have an edge over FCEL currently. While PLUG carries a VGM of D, FCEL has a VGM of F.

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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