One Wall Street analyst thinks Plug Power’s impressive run will continue next year.
Plug Power (PLUG 35.16%) stock is on a roll. Since May, shares have shot higher in value by more than 250%. While some experts remain bearish, one Wall Street analyst predicts that shares have another 137% in upside to go over the next 12 months. This isn’t an old prediction, either. This analyst reaffirmed his prediction this week, stressing that Plug Power has reached an “inflection point” in its hydrogen fuel cell business.
If you’re tracking Plug Power stock, you’ll want to hear what this analyst has to say in detail.
2 reasons to be excited for Plug Power stock in 2026
Eric Stine, an analyst at Craig-Hallum, a regional investment bank, reaffirmed his “buy” rating on Plug Power stock on Sept. 30. His price target of $4 per share is among the highest of any analyst. Plug Power’s CFO Paul Middleton and VP of IR Roberto Friedlander met with investors last week, and Stine apparently liked what he heard. According to reports, this was Middleton’s first roadshow in more than a decade. He personally purchased more than 1 million shares earlier this year.
What exactly impressed Stine during these meetings? There were two catalysts. First, Stine was pleased to see the company pitching itself more aggressively to analysts and investors in general. Over the years, hydrogen stocks have gone in and out of style. But with renewed enthusiasm surrounding hydrogen’s potential to meet the rapidly growing energy needs of the artificial intelligence sector, Stine was happy to see Plug Power insert itself more actively into the conversation. He predicts that Plug Power’s revenue growth will accelerate through this year and 2026.
Stine believes this revenue acceleration will be complemented by streamlined business operations. Plug Power recently announced a batch of headcount reductions, with the goal of reaching positive gross margins by the end of 2025, plus positive EBITDA margins by the end of 2026.
All in all, Stine has an optimistic outlook for Plug Power, backed by predictions of higher sales, lower costs, and dramatically improved profitability metrics. But before you jump in, you should understand the perspective of more bearish analysts.
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Don’t forget that Plug Power still faces serious challenges
While Stine is bullish on Plug Power stock, many analysts remain bearish. Several prominent analysts think there is anywhere between 30% to 50% downside to shares over the next 12 months. That’s a huge difference compared to Stine’s prediction. These analysts are likely concerned with two major challenges Plug Power faces. These challenges will remain present not only over the next year, but perhaps over the next decade and beyond.
The first issue is simply a matter of cash flow. Plug Power posted a net loss of $227 million last quarter. That means the company lost nearly 10% of its market cap in just 90 days. While the company is guiding toward positive gross margins, investors should remember that it has only managed to achieve this a few times in its 25-year operating history. Over the last 12 months, the company has generated negative $600 million in cash flow from operations. To plug the gap, large amounts of stock have been sold, diluting shareholders along the way. Until Plug Power can prove its ability to reach profitability, investors should treat management’s guidance with caution.
But there’s more to this story than poor financials. Plug Power’s technology focuses on proton exchange membranes. This technology is fairly proven, but involves more material cost and can have lower efficiencies versus technologies like solid oxide electrolyzer cells. That technology is often more efficient but can struggle at higher temperatures, though recent technological advances may overcome that limitation.
In short, there’s still plenty of ongoing innovation when it comes to which hydrogen technologies will see long term adoption. So while cost cuts will help Plug Power move toward profitability, it may hamper its ability to invest into research and development. Some analysts like Stine remain bullish. But I’m remaining on the sidelines until Plug Power proves that its technology can see increased demand at reasonable gross margins.
Ryan Vanzo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
