Profitability has proven to be elusive for Plug Power (PLUG 0.32%) over the years. The hydrogen energy pioneer has been a public company for more than a quarter-century. Despite that, it reported a net loss of over $1.6 billion last year (more than double the $710 million in revenue it generated).
New CEO Jose Luis Crespo wants to change that. Here's a look at whether now is the time to buy the hydrogen energy stock.
Image source: The Motley Fool.
Time for a change
Plug Power welcomed Jose Luis Crespo as its new CEO last month. He took over for Andy Marsh, who transitioned to the Chairman of the Board. Marsh had served as its CEO since 2008 and led the company's transformation into a global leader in hydrogen. However, due to persistent losses, the company's share price fell nearly 95% during his tenure, as Plug Power had to routinely issue new shares (diluting existing investors) to fund its operations and expansion.
Crespo has been with the company for more than a dozen years and most recently served as its President and Chief Revenue Officer. He has played an instrumental role in helping Plug grow its revenue from $27 million in 2013 to more than $700 million last year. He's helped deepen the company's strategic partnerships with customers while expanding its global commercial platform.
NASDAQ: PLUG
Key Data Points
Starting to turn the corner
Plug Power laid out a multi-year plan in 2025 to reach profitability. Its goal for last year was to end with a positive gross margin, which it achieved. This year, the company aims to reach positive earnings before interest, taxes, depreciation, and amortization (EBITDA) by the fourth quarter. It's taking a dual approach to reach that goal by executing actions to reduce costs while simultaneously growing its business.
This strategy has the company on track to generate positive operating income by the end of 2027 and reach full profitability by the end of 2028. Under Crespo's leadership, Plug Power plans to execute with discipline to drive margin improvement. It also aims to capitalize on the more than $8 billion revenue pipeline it has developed.
Plug Power's improving profitability over the past year has enabled it to meaningfully reduce its cash burn rate (down 26.5% last year to $535.8 million). The company entered this year with $368.5 million of cash and another $275 million expected through asset monetization sales. Add in the continued improvement in its cash burn rate this year, and Plug Power expects to have all the funding needed for its operations in 2026. As a result, it won't need to sell more stock and dilute existing investors this year, which should keep some of the pressure off its stock price.
Plug Power is starting to get more interesting
Plug Power has made reaching profitability a priority under new CEO Jose Luis Crespo. However, the company is still several years away from reaching that goal. While it has exciting growth potential, I'd wait to see more progress on the profitability front before buying shares of this clean energy stock.
