Plug Power Undertakes Cost Measures: Can It Overcome Rising Losses?

Plug Power Inc. PLUG is focusing on expense reduction and operational efficiency to ease the ongoing financial pressures. The company is working on improving its supply chain, workforce optimization and realignment of its manufacturing and real estate setup, which are aimed at easing cost burdens and improving overall margin performance. Despite these efforts, PLUG’s gross margins declined from negative 57.6% in the third quarter of 2024 to negative 67.9% in the third quarter of 2025. Plug Power reported a gross loss of $120 million in the third quarter of 2025, up 20% year over year. High equipment costs and an increase in fuel delivery expenses have weighed heavily on results.

High impairment charges were also incurred in the quarter. Plug Power recorded more than $97 million in impairments related to property, plant and equipment, along with additional write-downs tied to prepaid capital expenditures, contract assets, right-of-use assets and power purchase agreements related equipment. These changes reflect challenges associated with project execution, customer disputes and changes in site and real estate strategy.

However, PLUG remains focused on lowering input costs and improving operational discipline as part of its long-term plan. By tightening spending, Plug Power aims to support better margins while building new hydrogen plants and expanding its electrolyzer capacity. These efforts position the company to make progress toward overcoming its rising losses.

Margin Performance of PLUG’s Peers

Among PLUG’s major peers, Flux Power Holdings, Inc.’s FLUX total cost of sales was $9.41 million, down 13.7% year over year in the fiscal first quarter of 2026 (ended September 2025). However, Flux Power’s gross profit declined 27.8% year over year. Flux Power’s gross margin decreased 380 basis points, due to lower average selling prices. 

Plug Power’s another peer, Bloom Energy Corp.’s BE, cost of revenues surged 46% year over year in the third quarter of 2025. However, Bloom Energy’s gross profit rose 92.6% year over year. Bloom Energy’s gross margin expanded 540 basis points to 29.2%, driven by productivity gains, higher volumes and favorable pricing.

The Zacks Rundown for PLUG

Shares of Plug Power have gained 0.4% in the year-to-date period compared with the industry’s growth of 22.1%.

From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 6.50X against the industry average of 21.54X. PLUG carries a Value Score of F.

The Zacks Consensus Estimate for PLUG’s bottom line for fourth-quarter 2025 has decreased a penny in the past 60 days.

The company 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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