Plug Power vs. Bloom Energy: Which Fuel Cell Stock Should You Bet On?
Plug Power has been witnessing lower sales of hydrogen equipment and related infrastructure, its major source of income. Lower sales of GenDrive units, GenSure stationary backup power units, cryogenic storage equipment and liquefiers have been weighing on the company's performance. The decline in revenues from the sales of hydrogen infrastructure is primarily attributable to the reduced hydrogen site installation activities, partially offset by higher sales of electrolyzers.PLUG's number of hydrogen site installations declined from 52 to 15 in 2024 on a year-over-year basis. In the first quarter of 2025, this number reduced to one from three in the year-ago quarter. This has been adversely impacting its revenues related to the sales of hydrogen infrastructure.Another major issue that has plagued the company is its inability to generate positive gross margins and cash inflows. It recorded a gross margin of negative 55%, while its operating cash outflow totaled $105.6 million in first-quarter 2025.The weak liquidity position has compelled PLUG to sell shares to raise funds for its operations and invest in hydrogen plants. In the first quarter, it received $267.5 million as net proceeds from equity sales and the amount totaled $857.9 million in 2024.However, Plug Power offers solid long-term growth opportunities given that the green hydrogen energy market is estimated to grow to $30 billion by 2030. The company's strong expertise in providing and installing electrolyzers is underlined by its deployment of substantial proton exchange membrane (PEM) electrolyzer systems to date. This is underlined by its successful PEM electrolyzer deployment at the largest U.S. electrolytic liquid hydrogen production plant in Georgia. Its cost reduction and supply-chain optimization efforts have also been aiding it in slowing down its cash burn rate, which declined nearly 50% year over year in the first quarter. In the same quarter, PLUG launched Project Quantum Leap, targeting to generate more than $200 million in annualized savings.As part of the project, it expects to benefit from sales growth, pricing actions, inventory and capex management, and increased leverage of its hydrogen production platform. It expects the project to boost its cash flow and reduce the cash burn rate in the quarters ahead.
Bloom Energy manufactures one of the most advanced and versatile fuel cell energy platforms. With approximately 1.4 GW of BE's Energy Server systems deployed in more than 1,000 locations and nine countries, its fuel cell platform empowers businesses, essential services, critical infrastructure, utilities and communities with resilient, reliable and sustainable energy solutions.The company is poised to benefit from its expanding domestic and international commercial capability. BE's fuel cell deployments have very high power density, 100 megawatts (MW) per acre. This allows it to meet the rapid electricity demand growth from the data centers.In February 2025, Bloom Energy announced an expansion of its longstanding relationship with Equinix. Its fuel cells allow Equinix to generate on-site power at its data centers more sustainably than typical grid-delivered energy. The latest collaboration should further strengthen BE's position in the rapidly evolving renewable energy space.South Korea is a very important market for Bloom Energy and ongoing projects in this country continue to contribute to its earnings. BE's fuel cell projects with SK ecoplant in South Korea have significantly contributed to its performance in the past several quarters.The company's ability to generate healthy margins also adds to its strength. In first-quarter 2025, Bloom Energy's gross margin expanded 11 percentage points to 27.2% from the year-ago quarter.However, the company has been grappling with rising costs and expenses of late, which might hurt its profitability. In the first quarter, BE's cost of revenues surged 20% year over year, while its total operating expenses increased 23.8%. As a percentage of revenues, the metrics remained high at 72.8% and 33.1%, respectively.
The Zacks Consensus Estimate for PLUG's 2025 sales is $715.4 million, implying year-over-year growth of 13.8%. The consensus estimate for its bottom line is pegged at a loss of 59 cents per share.
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The Zacks Consensus Estimate for BE's 2025 sales is approximately $1.8 billion, indicating growth of 19% year-over-year. Its earnings per share (EPS) are pegged at 42 cents per share, implying year-over-year growth of 50%.
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In the past year, Plug Power's shares have lost 49.1%, while Bloom Energy stock has surged 95.1%.
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From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 2.34X. In comparison, Bloom Energy's forward earnings multiple currently sits at 38.22X.
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Plug Power and Bloom Energy have a Zacks Rank #3 (Hold) each, which makes choosing one stock a difficult task. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.Although the significant dip in PLUG stock is concerning, its strong foothold in the green hydrogen market, innovative product portfolio and the Quantum Leap project are likely to be beneficial in the long run. The ongoing challenges, including lower sales of hydrogen infrastructure and negative gross margins and cash outflows, are likely to continue impacting the company's performance in the short term.In contrast, Bloom Energy's strength in the fuel cell and electrolyzer markets, along with its growth investments and strategic partnerships, bodes well for strong growth in the quarters ahead. Additionally, the company's strong sales and earnings estimates instill investor confidence. Given these factors, BE seems a better pick for investors than PLUG currently.
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