When investors stop anticipating positive news, a certain kind of silence descends upon a stock. For some time now, Plug Power has been residing in that quiet. After opening at $3.80 and narrowly missing an intraday low of $3.32, the shares fell roughly 9.8% to $3.41 in late-morning trading. It is still one of the busier clean-energy names on the tape, with trading volume exceeding 54 million shares. The market is observing. Simply put, it is no longer impressed.
Observing the company’s quarterly cycle has begun to resemble watching the same play in slightly different lighting. For almost thirty years, Plug Power, which has its headquarters in Slingerlands, New York, and facilities spread across Spokane and Rochester, has worked to persuade the world that hydrogen fuel cells belong in forklifts, delivery vans, refineries, and eventually heavy trucks. The joke isn’t the technology per se. The GenDrive system, which refuels in minutes rather than hours and fits into the same space as outdated lead-acid batteries, is genuinely effective. Warehouse fleets and even the USPS, which started utilizing GenDrive units at its Capitol Heights location in Maryland years ago, have embraced it. The engineering narrative has always been believable. The story that keeps failing is the financial one.
The tone was momentarily changed by the first-quarter report. The company reported that gross margin, which is the portion of revenue left over after direct production costs, improved to negative 13% from negative 55%. Revenue came in at $163.5 million, up 22% from the previous year. The quarter was characterized by “strong commercial execution,” according to CEO Jose Luis Crespo, who hinted at an EBITDAS-positive goal by the fourth quarter. Interest, taxes, depreciation, amortization, and share-based compensation are eliminated by EBITDAS, which is a generous method of calculating profit and an indication that traditional metrics are still difficult to talk about.
Beneath it all is the catch. Compared to the $196.7 million loss in the same quarter last year, the company’s net loss attributable to the quarter was $245.3 million, according to the quarterly filing. At the end of March, there was $802 million in cash, cash equivalents, and restricted cash. That is a significant buffer, but it also decreases with each quarter of unprofitable growth. It appears that investors think the company is getting better. The length of the runway is less certain.
It’s difficult to ignore how frequently Plug Power makes major announcements that don’t spark market excitement. Galp’s Sines Refinery in Portugal received the first of ten 10MW GenEco electrolyzers from the company last October; the full 100MW deployment is anticipated to replace 20% of Galp’s gray hydrogen and remove 110,000 tons of carbon dioxide annually. Prior to that, in January 2024, Plug opened what it claimed to be the biggest electrolytic liquid hydrogen plant in the US, with a daily production capacity of 15 tons, in Woodbine, Georgia. These are not minor undertakings. Either headline could have caused the stock to soar ten years ago. It hardly registers at all today.
There is a history behind some of that skepticism. Since going public in October 1999, Plug Power has been involved in a class action lawsuit alleging securities fraud due to alleged misrepresentations regarding its fuel cell capabilities and its affiliation with General Electric. That chapter was closed in 2004 with a $5 million settlement, but another one began in 2021 when the company was forced to restate its 2018 and 2019 financials due to late filing of its 2020 annual report. Long-term investors keep this in mind.
Observing all of this gives the impression that Plug Power is simultaneously trapped in two stories. One is about a hydrogen economy that might eventually materialize, albeit slowly and costly, with European refineries, Korean alliances through SK Group, and joint venture aspirations with Renault. In the other, a business has been making financial promises for longer than the majority of investors in clean energy have been alive. Years ago, Tesla had to overcome similar skepticism. It’s still unclear if Plug Power has the same amount of time remaining.
