Plug Power Inc. (PLUG), a hydrogen fuel-cell and clean-energy firm, showcased clear signs of progress in its latest earnings call, and the market is rewarding the stock for it. PLUG shares rose nearly 13% on Monday and moved higher again in premarket trade today, rising about 11%.
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Plug Power’s Q1 revenue rose 22% year-over-year to $163.5 million, helped by growth in its material handling and electrolyzer units. At the same time, gross margin improved to negative 13% from negative 55% a year ago, which points to better cost control and more stable unit trends.
CEO Jose Luis Crespo said the results show “strong commercial execution and continued progress improving the underlying economics of the business.”
Margins Improve, but Losses Remain High
Still, Plug is not out of the woods. The firm posted a GAAP net loss of $246 million, while cash used in operating activities was $150 million. That keeps the focus on cash use, funding, and whether Plug can keep cutting costs while it grows.
There were some key bright spots. Service costs for GenDrive fuel cells fell more than 30% per unit from last year, while hydrogen fuel sales rose 22%. Plug also said hydrogen fuel margin improved by 54 points, helped by higher volume, lower third-party supply costs, and better use of its hydrogen network.
In addition, the firm ended the quarter with more than $802 million in total cash, of which only $223 million was not subject to limits. Plug also expects about $275 million from hydrogen asset sales, with the first $142 million deal set to close in June.
Overall, Plug’s Q1 was a step in the right direction, with stronger sales and much better margins, but the company still needs to prove it can cut cash burn and move closer to steady profits.
Is PLUG a Good Stock to Buy?
Turning to the Street, Plug Power split analysts’ views with a Hold consensus, based on 10 ratings. The average PLUG stock price target is $3.31, which implies a 5.93% downside from the current price.
