Plug Power's Equipment Revenues Decline: Is the Risk Priced In?

Plug Power Inc. PLUG is facing headwinds in some of its core product categories. In the first quarter of 2025, revenues from equipment, related infrastructure and other products declined 7% year over year to $63.5 million.

The decrease in revenues resulted from lower demand for hydrogen infrastructure, cryogenic equipment, fuel cell systems (GenDrive), and engineered oil and gas equipment. In the quarter, hydrogen infrastructure revenues decreased by $6.6 million, owing to one hydrogen site installation completed compared with three completed in the same period last year. GenDrive sales also fell, with just 848 units sold compared with 1,298 units in the prior year, resulting in a $2.3 million revenue decline. Cryogenic equipment sales slipped due to slower progress on projects that are nearing completion. Sales of engineered oil and gas equipment, acquired through the Frames acquisition, also declined by $2.7 million in the quarter. These results show that some of Plug Power’s legacy product lines are losing momentum.

However, Plug Power’s electrolyzer product line surged 581.7% year over year in the first quarter, driven by increased deliveries across North America, Europe and Asia. Also, a recent three gigawatt (GW) deal with Allied Green Ammonia in Australia and more than eight GW in design contracts highlight growing global demand for green hydrogen. If the current pace holds, this growth could help offset weakness in PLUG’s legacy product lines and reshape its long-term growth path.

Plug’s Peers in Equipment Sales

Among its major peers, FuelCell Energy, Inc. FCEL reported product revenues of $13.0 million in the second quarter of fiscal 2025. FuelCell’s total revenues rose 67% to $37.4 million in the same period, reflecting gains in service agreements. FuelCell continues to deploy its mature carbonate fuel cell systems, which generate clean electricity, heat and hydrogen, and support carbon capture.

PLUG’s another peer, Bloom Energy Corporation’s BE product and service revenues increased 26.5% year over year in the first quarter of 2025. Bloom Energy’s total revenues rose 38.6% year over year. This growth was driven by strong demand for Bloom Energy’s solid oxide fuel cell systems and expanding adoption of hydrogen-capable solutions.

The Zacks Rundown for PLUG

Shares of Plug Power have lost 42.8% in the year-to-date period against the industry’s growth of 12.1%.

From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 2.45X against the industry average of 21.16X. PLUG carries a Value Score of F.

The Zacks Consensus Estimate for PLUG’s bottom line for second-quarter 2025 has increased 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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