Why Plug Power Stock Plunged Another 16% in March

Plug Power (PLUG -1.23%) has now logged three straight months of double-digit percentage stock price drops, with shares of the hydrogen fuel cell maker tumbling another 16.1% in March after losing nearly 13% in each of the first two months of the year, according to data provided by S&P Global Market Intelligence. The hydrogen stock is now down a whopping 43% so far in 2025, as of this writing.

While it’s hard to remember when Plug Power last impressed investors with its numbers, some of the figures it revealed in March induced more investors to dump the stock.

Plug Power’s problems keep getting bigger

Sales of Plug Power’s equipment slumped by 45% in 2024 to only $390 million. Lower demand for its fuel cell systems, fewer hydrogen site installations and new liquefier projects, and slow progress on existing projects were just some of the factors that dragged down its top line. The company evidently has a demand problem, but it gets much worse.

The clean energy company reported a negative gross margin of 78% on the sale of its hydrogen infrastructure and equipment for 2024 versus a negative gross margin of 7.6% in 2023. Simply put, Plug Power’s cost of production has become so high that it lost 78 cents for every dollar of revenue it brought in through its core business last year. It’s hard to understand the magnitude of that loss, and even harder to understand how it expects to pull itself out of this muck. Or, maybe it’s not that hard.

In March, Plug Power once again sold new shares to raise money — $280 million worth. Although its cash flow burn improved by 34% in 2024 thanks to its ongoing restructuring moves, Plug Power’s negative free cash flow was still over $1 billion, and it reported a net loss of $2.1 billion in 2024.

Is Plug Power stock a buy after its steep fall?

Although it keeps selling shares to raise money to keep the company afloat, management has come up with another plan: Project Quantum Leap. That’s the name it has given to a program of additional measures that it’s planning to undertake to cut costs further, including layoffs. Plug Power expects the project to cut its annual expenses by $150 million to $200 million.

Unfortunately, that doesn’t seem like it would be enough to steer Plug Power out of its difficult financial situation. Given that the loan guarantee of $1.66 billion that the Department of Energy approved for the clean energy company at the tail end of President Joe Biden’s administration is most likely to be canceled by President Donald Trump, I wouldn’t be surprised if the company has to sell more stock to raise the money it will need to survive a little longer. If I were you, I’d steer clear of a company that’s struggling to sell its products, burning cash, and diluting existing shareholders’ capital through frequent share sales.