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Investing.com - H.C. Wainwright has reiterated its Buy rating on Plug Power (NASDAQ:PLUG) with a price target of $3.00, citing improved service margins and reduced regulatory uncertainty. Currently trading at $1.58, the stock sits well below analyst targets ranging from $0.55 to $5.00. InvestingPro data shows the stock has demonstrated strong volatility, with a beta of 2.35.
The company’s service margins improved to 39% in the second quarter of 2025 from approximately 14% in the first quarter, driven by its Project Quantum Leap initiative. This improvement stems from workforce optimization, facility consolidation, reduction of professional and software costs, and renegotiation of supply contracts. According to InvestingPro analysis, the company’s overall gross profit margin remains challenged at -77.54%, with multiple financial health indicators suggesting careful monitoring is warranted. Get access to 10+ additional ProTips and comprehensive analysis with an InvestingPro subscription.
Plug Power is on track to achieve gross margin break-even by the end of 2025 and EBITDA break-even by the end of 2026, according to the company. The firm has already monetized tax incentives from its Georgia plant and is working to monetize incentives related to its 15 tons per day plant in Louisiana.
Regulatory clarity has improved with the extension of Section 48E Tax Credits (2026-2032) and Section 45V Tax Credits for projects commenced before the end of 2027 under the One Big Beautiful Bill Act. These extensions, along with direct-pay and transferability features, are expected to boost near-term customer interest.
The company continues to expand its customer base internationally with focus on several regions including Europe, Central Asia, and Australia, leveraging the tax incentives to support its growth strategy.
In other recent news, Plug Power has reported its second-quarter 2025 earnings, revealing a 21% year-over-year increase in revenue, reaching $174 million, which surpassed the forecast of $158.48 million. Oppenheimer maintained its Perform rating on the company, highlighting the achievement of exceeding revenue and gross margin expectations. The company has made progress toward profitability, with a committed customer base supporting its restructuring efforts. Additionally, JPMorgan reiterated its Neutral rating, noting that while second-quarter revenue exceeded estimates, there were concerns about higher-than-expected cash burn. The company has also announced plans to resume construction at its Texas facility by the end of the year, potentially backed by Department of Energy loans or project financing. Wolfe Research reiterated its Peerperform rating, expressing concerns over delayed hydrogen production tax credit rules that have slowed market adoption. Despite these challenges, Plug Power’s advancements in electrolyzer and material handling sales are expected to contribute to growth in 2025.
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