Things were looking up for Plug Power (NASDAQ:PLUG). Until they weren’t.
TipRanks Black Friday Sale
- Claim 60% off TipRanks Premium for the data-backed insights and research tools you need to invest with confidence.
- Subscribe to TipRanks' Smart Investor Picks and see our data in action through our high-performing model portfolio - now also 60% off
After dropping below $1 per share in May, PLUG surged upward by 400% during the summer months and into the early fall. The company’s Q2 2025 earnings report in August reflected growing revenues of $174 million (up 21% year-over-year), a scaling business, and an improved gross margin, among other positives.
The Q3 numbers released earlier this month seemed to mesh with the improving sentiment. While revenues of $177 million were roughly on par with the previous quarter, company management trumpeted its execution on strategic priorities and advancing operational performance.
And then, this Tuesday, not even a fortnight after its earnings call, the company disclosed that it is taking on more debt – $375 million worth of convertible senior notes. The company will be using the majority of this funding to repay some of its high-cost obligations.
Needless to say, the market wasn’t thrilled, and PLUG plunged downward by double digits in yesterday’s trading session. Investor Neha Chamaria understands the gloomy mood.
“None of this looks good for Plug Power, especially since the company is not raising funds to invest in growth or even run its operations,” explains the 5-star investor.
The debt raise shines a harsh spotlight on the company’s liquidity and financial stability concerns, emphasizes Chamaria. Not surprisingly, this has caused the market to wonder if PLUG is in danger of “running out of money.”
However, that’s not the only worry buffeting PLUG. She mentions a coming leadership change, a gross loss that grew in Q3 on a year-over-year basis, as well as PLUG’s decision to deprioritize in-house hydrogen production — which Chamaria calls “a surprising move that deviates from the company’s plans.”
Though Chamaria has previously predicted that PLUG could skyrocket over the next five years, the investor acknowledges that the ride is likely to be volatile.
“I will conclude with something I have always said: challenges are aplenty, and a lot could go wrong with the company in between,” sums up Chamaria, adding that this “was one such day.” (To watch Neha Chamaria’s track record, click here)
The vibes on Wall Street are fully mixed, though caution appears to be the order of the day. With 5 Buys, 8 Holds, and 3 Sells, PLUG carries a consensus Hold (i.e. Neutral) rating. Its 12-month average price target of $2.95 implies an upside north of 50%. (See PLUG stock forecast)
To find good ideas for stocks trading at attractive valuations, visit TipRanks’ Best Stocks to Buy, a tool that unites all of TipRanks’ equity insights.
Disclaimer: The opinions expressed in this article are solely those of the featured investor. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.