Bloom Energy vs. Plug Power: Which Fuel-Cell Stock Should You Buy Now?

Fuel cell technology is becoming increasingly vital as the global shift toward clean and sustainable energy gains momentum. By generating electricity from hydrogen or other fuels through an electrochemical reaction, fuel cells deliver high efficiency with minimal emissions, positioning them as a crucial driver of decarbonization across multiple sectors.

They offer dependable and scalable energy solutions for transportation, stationary power and backup systems, all while avoiding the intermittency issues faced by solar and wind power. Bloom Energy BE and Plug Power PLUG are two prominent operators in the fuel cell technology space.

With growing efforts from governments and industries to lower carbon emissions, fuel cells play an essential role in advancing net-zero goals and building a cleaner, more resilient energy landscape. The ability of fuel cell technologies to provide 24/7 clean energy to customers can reduce dependency on the grid and their ability to provide scalable power onsite can lessen the need for transmission and distribution lines.

Bloom Energy presents a compelling investment opportunity as a leader in clean, reliable onsite power generation. Its solid oxide fuel cell technology enables customers to produce electricity directly at their facilities with high efficiency and near-zero emissions, reducing reliance on the grid and enhancing energy resilience. As corporations and institutions seek dependable and sustainable power solutions to meet decarbonization goals, Bloom Energy’s scalable platforms position it for strong growth in the evolving distributed energy landscape. 

Plug Power represents a compelling investment opportunity as a leader in the green hydrogen and fuel cell market. The company delivers clean and efficient power solutions across transportation, industrial and stationary sectors, helping customers cut carbon emissions and lessen reliance on fossil fuels. Supported by its expanding hydrogen production and distribution network, Plug Power is strategically positioned to benefit from the rising global demand for sustainable energy and the rapid transition toward a hydrogen-powered economy.

Plug Power and Bloom Energy are prominent players in the fuel cell market and the different core fuel cell technologies used by these companies determine their primary markets. Let us focus on the fundamental factors of these companies and try to find which one presently has a better possibility to provide higher returns to investors.

BE & PLUG’s Earnings Growth Prospects

The Zacks Consensus Estimate for BE’s 2025 and 2026 earnings indicates year-over-year growth of 78.57% and 56%, respectively. Long-term (three to five years) earnings growth per share is pegged at 28.02%.

The consensus mark for PLUG’s 2025 and 2026 earnings implies year-over-year growth of 76.87% and 49.77%, respectively. 

Return on Invested Capital

The return on invested capital (“ROIC”) measures how well a company generates returns on the money it invests. ROIC is a key indicator of a company's profitability and operational efficiency. The ROIC of the company indicates that it is investing money more efficiently than peers in the industry.

BE’s current ROIC is 4.62% against PLUG’s negative 57.91%. It indicates BE is using the funds more efficiently than PLUG.

Debt to Capital

The fuel cell technology stock needs a lot of funding for infrastructure, and research and development to make the projects commercially viable.

Bloom Energy’s present debt to capital is 64.55% compared with Plug Power’s 22.44%. It appears BE is using a higher amount of debt to fund its operation. But when we consider the Times Interest Earned Ratio (“TIE”), we can find that BE’s ability is much better than PLUG to timely service its debt.

BE’s TIE is 1.3 against PLUG’s negative 36.1.

Valuation

Bloom Energy is currently trading at a premium valuation compared with Plug Power, with its forward 12-month price-to-sales (P/S) ratio at 13.56X. Plug Power is currently trading at P/S12M of 3.7X.

Price Performance

In the past three months, BE’s shares have gained 248.2% compared with PLUG’s return of 89.3%. 

Rounding Up

Bloom Energy and Plug Power are both working tirelessly to provide reliable, emission-free electricity to their customers.

Bloom Energy’s strong earnings estimate movement, higher ROIC, better TIE ratio and price performance make it more attractive compared with Plug Power.

Given the above discussion, Bloom Energy has better potential at present when compared with Plug Power.

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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