Plug Power Inc. PLUG continues to face profitability challenges despite making progress through cost-reduction and operational efficiency initiatives. The company is focused on lowering hydrogen sourcing costs, optimizing its workforce and reorganizing its manufacturing and real estate setup. These steps are meant to lower expenses and help improve margins over time by increasing utilization across its hydrogen network.
However, Plug Power remains unprofitable. In the first quarter of 2026, PLUG reported a net loss of approximately $246 million compared with a net loss of $196.9 million in the year-ago quarter. Ongoing operating losses and cash usage continue to pressure the company's financial performance.
Plug Power delivered significant margin improvement during the quarter. In the first quarter, its gross margin improved to negative 13% from negative 55% reported in the year-ago period, improving 71% year over year. The improvement was driven by higher sales volumes, cost optimization efforts, enhanced service performance and lower third-party hydrogen sourcing costs. Hydrogen fuel margin rates also improved 54% year over year due to greater leverage on the company's hydrogen network, higher volumes and improved operating efficiency.
Despite the challenges, Plug Power remains committed to long-term recovery. The company continues to focus on margin expansion, disciplined capital deployment and converting its project pipeline into profitable growth. Through ongoing cost reductions, expansion of its hydrogen production network and growth in its electrolyzer business, Plug Power aims to improve its margin trajectory.
Margin Performance of PLUG’s Peers
Among PLUG’s major peers, Bloom Energy Corp.’s BE cost of revenues surged more than 100% year over year in the first quarter of 2026. However, Bloom Energy’s gross profit rose 154.3% year over year. Bloom Energy’s gross margin expanded 280 basis points to 30%, driven by productivity gains, higher volumes and favorable pricing.
Plug Power’s another peer, Flux Power Holdings, Inc.’s FLUX total cost of sales was $4.8 million, down 58% year over year in the fiscal third quarter of 2026. However, Flux Power’s gross profit declined 66% year over year. Flux Power’s gross margin decreased 430 basis points year over year.
The Zacks Rundown for PLUG
Shares of Plug Power have surged 161.5% in a year compared with the industry’s growth of 113.2%.
Image Source: Zacks Investment Research
From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 15.85X against the industry average of 38.36X. PLUG carries a Value Score of F.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for PLUG’s bottom line for 2026 has declined in the past 60 days.
Image Source: Zacks Investment Research
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Plug Power, Inc. (PLUG): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).