Is Plug Power (NASDAQ:PLUG) a buy right now?

Plug Power’s (Plug Power Stock Quote, Chart, News, Analysts, Financials NASDAQ:PLUG) third-quarter revenue exceeded expectations as demand for hydrogen fuel-cell systems improved, but continued losses and cash consumption remain challenges for the company.

Roth Capital Partners analyst Craig Irwin maintained his “Buy” rating and US$5.00 target on the Latham, N.Y.-based hydrogen technology company, saying new customers and replacement orders from Walmart and Amazon could support further growth.

Plug reported third-quarter revenue of US$200.6-million, ahead of Irwin’s US$180-million estimate and consensus of US$198.4-million. Adjusted EBITDA was negative US$42.7-million, compared with Irwin’s forecast loss of US$40.5-million and consensus of US$53.6-million. Gross margin was negative 2.7%, compared with negative 0.9% in the previous quarter and negative 67.9% a year earlier. The company reported earnings of US$0.07 per share, but that included US$192-million in non-cash gains related to warrants and convertible debt. Excluding those gains, adjusted earnings were negative US$0.05 per share. Plug also recorded a US$10.4-million benefit related to lost service contracts, improving reported gross margin by approximately 6.5 percentage points.

In his Nov. 10 report, Irwin said the company’s materials handling business, which supplies hydrogen fuel cells for forklifts and other warehouse equipment, remains its principal growth opportunity.

“We will watch closely for potential conversion of 4-5 new pedestal customers in Materials Handling, as these could deliver growth momentum on top of the 20k refresh base for WMT and AMZN,” he said.

Plug deployed 1,136 GenDrive fuel-cell systems during the quarter, compared with 540 a year earlier. Management expects demand to increase in the fourth quarter, supported by replacement orders from Walmart and Amazon. The company anticipates replacing approximately 20,000 units for those customers over the next two to three years, with 2,000 to 2,500 replacements expected in the fourth quarter.

Irwin said increased production volumes could improve materials handling gross margins to between 30% and 40%.

Hydrogen fuel sales remained less profitable. Third-quarter revenue reached US$38.1-million, but fuel gross margin declined to negative 52% following unplanned plant outages that forced Plug to purchase hydrogen from outside suppliers. Management expects those problems to ease, potentially improving quarterly fuel gross profit by US$5-million to US$7-million.

Cash consumption also declined to US$79.7-million from US$100.4-million in the second quarter and US$117.5-million a year earlier. However, Plug ended September with only US$134-million in unrestricted cash, making further reductions in spending and improved cash generation important to its outlook.

Irwin believes asset sales, hydrogen production tax credits and the release of cash tied up in power purchase agreements could help the company approach cash neutrality in 2027.

Management maintained its 2026 revenue growth guidance of 15% to 16% and continues to target positive Adjusted EBITDA in the fourth quarter.

“While our model is conservative, mid-teens 4Q26 gross margin execution could deliver an adj-EBITDA+ quarter,” Irwin said.

He forecasts fiscal 2026 revenue of US$815-million and negative Adjusted EBITDA of US$230.4-million, compared with his previous Adjusted EBITDA loss estimate of US$213.4-million. For fiscal 2027, he expects revenue of US$895-million and negative Adjusted EBITDA of US$150-million.

Irwin says improved operating performance and additional customer contracts could support a recovery in Plug’s valuation.

-30-