I’ve been skeptical of Plug Power stock, but recent changes could change my mind.
Over the past 25 years, Plug Power (PLUG 8.77%) has demonstrated that there’s a strong appetite for both fuel cell solutions and hydrogen. From its longtime partnership with Walmart to the recent development of a hydrogen production plant in Louisiana, Plug has notched a variety of victories.
One area where it persistently comes up short is with the bottom of the income statement. Despite all of its success, Plug has failed to demonstrate that it can be profitable in its endeavors.
But I’m not giving up all hope yet as I think the company still has potential to flourish.
Image source: Getty Images.
Project Quantum Leap is producing results
Earlier this year, management announced an expense-reducing initiative dubbed Project Quantum Leap. In addition to reducing its workforce, the cost reduction strategy entails reductions in both discretionary spending and capital expenditures. Management projects that Project Quantum Leap will lower costs by about $150 million to $200 million annually.
With half of 2025 in the rear-view mirror, it seems that Project Quantum Leap is producing results. For the first six months of 2025, Plug reported a gross profit margin of negative 41.4%, a notably narrower loss than the gross profit margin of negative 110.1% that it posted during the same period in 2024.
Lauding the initiative and suggesting that further improvements are in store for the rest of 2025, Andy Marsh, Plug’s CEO, stated on the Q2 2025 conference call: “Project Quantum Leap remains central to these gains as we streamline our operations, consolidate facilities and drive efficiencies across the business. We remain on track for gross margin neutrality by Q4 with tangible steps in place to get there.”
Does Plug’s improving performance make the stock a buy?
Although Plug has a history of making bold financial projections and failing to achieve them, its success so far in 2025 has me intrigued about the remainder of the year. The stock should still be reserved for those with high risk tolerances, but if the company achieves breakeven on a gross profit basis, Plug stock would become a lot more interesting.
Scott Levine has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool has a disclosure policy.
