Plug Power vs. FuelCell Energy: Which Fuel Cell Stock has Greater Upside?
These companies are poised to benefit from significant growth opportunities in the green hydrogen market due to growing demand for clean energy solutions and government initiatives to decarbonize various sectors. Let's take a closer look at their fundamentals, growth prospects and challenges.
The Case for Plug Power
Plug Power has been subject to a high cash burn rate and negative gross margins over the past several quarters. Lower revenues from the sales of hydrogen equipment and related infrastructure have been weighing on its performance. The company has been witnessing lower sales of GenDrive units, GenSure stationary backup power units, cryogenic storage equipment and liquefiers.
Despite this, PLUG has been focusing on scaling up its business and investing in hydrogen plants, given the long-term growth potential of the green hydrogen energy market. Going by some estimates, the green hydrogen energy market is expected to grow to $30 billion by 2030.
PLUG intends to capitalize on the opportunity with increased green hydrogen production at its new plant in Georgia, as well as a new joint venture with Olin Corporation OLN in Louisiana. Also, in January 2025, it secured a loan guarantee worth $1.66 billion from the U.S. Department of Energy (DOE) to support the construction of six green hydrogen production facilities. This marks a significant step in the expansion of its hydrogen production capabilities.
Plug Power'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.
PLUG's cost management and supply-chain optimization efforts have also supported it in slowing down its cash burn rate, which declined nearly 50% year over year in first-quarter 2025. In the same quarter, it launched Project Quantum Leap with a target to generate more than $200 million in annualized savings.
As part of the project, the company stands 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.
The Case for FuelCell Energy
FCEL continues to receive orders from its customers who need a 24/7 clean energy supply to efficiently run their operations. Earlier this year, the company received a contract to build a 7.4 MW fuel cell power plant in Hartford, CT. The project is expected to add more than $160 million of future revenues to FuelCell Energy's generation backlog. The backlog at the end of second-quarter fiscal 2025 (ended April 2025) was $1.26 billion, reflecting year-over-year growth of 18.7%.
The company's strategic partnership with Diversied Energy and TESIAC Corp. is also expected to accelerate its entry into the data center market and expand its penetration in deployed microgrid applications.
FuelCell Energy is also working on a global restructuring of its operations in the United States, Canada and Germany. This initiative will lower operating costs, realign resources toward advancing the company's core carbonate technologies and protect its competitive position in the clean energy market.
However, FCEL has been subject to negative gross margins over the past few quarters. Its gross margin was a negative 26% in the first six months of fiscal 2025. Rising operating costs and expenses have been weighing on its margins and profitability. For instance, in the first half of fiscal 2025, its cost of revenues increased 23% from the year-ago period.
FuelCell Energy's high debt level remains another concern. Its long-term debt balance at the end of second-quarter fiscal 2025 remained high at $124.1 million. Considering its high debt level, the company's cash and cash equivalents (unrestricted) of $116.1 million do not look impressive.
How Does the Zacks Consensus Estimate Compare for PLUG & FCEL?
The Zacks Consensus Estimate for PLUG's 2025 sales is $709.3 million, implying year-over-year growth of 12.8%. The consensus estimate for its bottom line is pegged at a loss of 59 cents per share.
The Zacks Consensus Estimate for FCEL's fiscal 2025 (ending October 2025) sales is approximately $144.6 million, indicating growth of 28.9% year over year. Estimates for its bottom line are pegged at a loss of $6.22 per share.
Price Performance and Valuation of PLUG & FCEL
In the past three months, Plug Power's shares have surged 91.8%, while FuelCell Energy stock has gained 37.4%.
From a valuation standpoint, Plug Power is trading at a forward price-to-earnings ratio of a negative 4.13X. In comparison, FuelCell Energy's forward earnings multiple currently sits at a negative 1.06X.
Conclusion
Plug Power and FuelCell 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.
FuelCell Energy's strength in the fuel cell market and solid backlog level have been diluted by rising costs and expenses, which have been denting its profitability. While PLUG's negative gross margins and cash outflows remain a near-term concern, its strong foothold in the green hydrogen market and growth investments are likely to be beneficial in the long run.
Additionally, PLUG's Quantum LEAP initiative and strong sales estimates instill investor confidence. Given these factors, PLUG seems a better choice for investors than FCEL currently.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They include
Stock #1: A Disruptive Force with Notable Growth and Resilience
Stock #2: Bullish Signs Signaling to Buy the Dip
Stock #3: One of the Most Compelling Investments in the Market
Stock #4: Leader In a Red-Hot Industry Poised for Growth
Stock #5: Modern Omni-Channel Platform Coiled to Spring
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.
Download Atomic Opportunity: Nuclear Energy's Comeback free today.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Plug Power, Inc. (PLUG): Free Stock Analysis Report
FuelCell Energy, Inc. (FCEL): Free Stock Analysis Report
Olin Corporation (OLN): Free Stock Analysis Report
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Vancouver Sun
42 minutes ago
- Vancouver Sun
The two ways Trump's tariffs on Canada could collapse — despite his fight to keep them
WASHINGTON, D.C. — Time's up. On Friday, U.S. President Donald Trump raised the tariff rate on Canadian goods not covered under the Canada-United States-Mexico Agreement (CUSMA) from 25 to 35 per cent, saying they 'have to pay a fair rate.' The White House claims it's because of Canada's failure to curb the 'ongoing flood of fentanyl and other illicit drugs.' U.S. Customs and Border Protection (CBP) data, however, show that fentanyl seizures from Canada make up less than 0.1 per cent of total U.S. seizures of the drug; most smuggling comes across the Mexican border. But the future of Trump's policy also rests on shaky ground, and the tariffs could come crashing down even if Canada can't reach a deal at some point. Imposed through a controversially declared 'national emergency' under the International Emergency Economic Powers Act (IEEPA), the tariffs come with essentially three paths for relief to Canadian exporters and their American customers: the courts and the economy. Start your day with a roundup of B.C.-focused news and opinion. By signing up you consent to receive the above newsletter from Postmedia Network Inc. A welcome email is on its way. If you don't see it, please check your junk folder. The next issue of Sunrise will soon be in your inbox. Please try again Interested in more newsletters? Browse here. And there's always the wildcard: that the president changes his mind. Without relying on that, National Post looks at two very possible ways out of all this: The courts: There is a big question hanging over whether Trump's tariffs are even legal under the U.S. Constitution, which gives Congress powers over trade. Trump has bypassed that by claiming he's using presidential IEEPA emergency powers. On Thursday, the Washington, D.C.-based Federal Circuit Court of Appeals convened an en banc hearing for oral arguments in challenges to Trump's use of IEEPA. The 11 judges questioned whether the law meant for sanctioning adversaries or freezing assets during emergencies grants Trump the power to impose tariffs, with one judge noting, 'IEEPA doesn't even mention the word 'tariffs.'' The White House, meanwhile, says the law grants the president 'broad and flexible' emergency powers, including the ability to regulate imports. 'Based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing,' Thomas Berry, the CATO Institute's director of the Robert A. Levy Center for Constitutional Studies said in a statement. 'Several judges peppered the government's attorney with skeptical questions about why a broad term in IEEPA like 'regulate importation' should be read to allow the president to unilaterally impose tariffs.' Trump's lawyers claim his executive order provides the justifications for the tariffs — in Canada's case, fentanyl. But Berry said 'those justifications would not matter if IEEPA simply does not authorize tariffs in the first place. That is the cleanest and simplest way to resolve this case, and it appears that the Federal Circuit may be leaning toward that result.' A decision is expected this month, and if it's a resounding pushback from the judges' panel, said Andrew Hale, a senior policy analyst at Heritage Foundation, the Supreme Court may not even take up the case. If so, he says, 'these Liberation Day tariffs and everything that's been imposed under emergency legislation, IEEPA, that all evaporates.' At that point, the White House would not be able to declare across-the-board tariffs against countries. Instead, it would have to rely on laws allowing tariffs to be imposed on specific products that are found to threaten U.S. national security, like those currently imposed on Canadian steel and lumber. The economy: The other path to tariff relief is through economic pressure. If Americans start to see higher prices and economic uncertainty, and push back at the ballot box — or threaten to do so — it could force Trump to reverse course. The most recent figures show that U.S. inflation, based on the Consumer Price Index, hit around 2.7 per cent in July. That's a slight rise, fuelled by rising prices for food, transportation, and used cars. But it's still close to the Federal Reserve target of 2 per cent. U.S. unemployment rose slightly to 4.2 per cent in July, while far fewer jobs were created than expected, and consumer confidence rose two points but is still several points lower than it was in January. Overall, most economists agree that risks of a U.S. recession over the next 12 months are relatively low, but skepticism over growth remains high. 'Our outlook is for slower growth in the U.S., but no recession,' said Gus Faucher, chief economist of The PNC Financial Services Group. He notes that the 'tariffs are going to be a drag' because they are a tax increase on imports. Economists have said price inflation from tariffs is not yet being felt in the U.S., but believe it's inevitable. 'Trump's tariff madness adds a great deal to the risks of a recession,' said Steven Hanke, professor of applied economics at Johns Hopkins University who served on President Reagan's Council of Economic Advisors. 'With tariffs, Americans are going to be paying a big new beautiful sales tax on goods and services imported into the U.S., and taxes slow things down. Taxes don't stimulate.' It is surprising that higher U.S. prices haven't happened yet, said Jonathan Gruber, chairman of the economics department at the Massachusetts Institute of Technology. But he explained that it's likely a reflection of the duration of contracts and the fact that import sellers haven't yet put up prices — 'because they were hoping it wouldn't be real, like they'd wake up from this nightmare.' 'I think we start to see the effect on prices by the end of the year,' said Gruber. The trouble for Canada, however, is that the Canadian economy is starting from a much weaker position, with higher unemployment, lower consumer confidence, and a slowing GDP, on top of the trade tensions. So, trying to wait things out for the U.S. to feel the pinch will be even more painful for Canadians. And any American downturn will also reverberate north. 'As Uncle Sam goes, so goes Canada,' said Hanke. Gruber agrees with that, but with a caveat. 'It's all bad in the short run and good in the long run,' he says. He believes the U.S. is 'weak and getting weaker' and that Canada should start taking advantage of how the U.S. is making opportunities for other countries to invest in themselves. 'We're not investing in our future. We're killing our education. We're killing our research. We're not allowing in immigrants,' he said, explaining the weakening of the U.S. economy. 'We're basically setting the stage for long-run economic slower growth.' Meanwhile, China is doubling down on investment, research and other longer-term policies. 'Canada and other countries need to do the same,' Gruber said. And as for when a backlash could lead to a reversal in the U.S., Gruber points to two factors. 'It's got to be high inflation, and Trump's opponents need to make sure that the voters understand that's Trump's fault.' National Post tmoran@ Our website is the place for the latest breaking news, exclusive scoops, longreads and provocative commentary. Please bookmark and sign up for our newsletters here .
Ottawa Citizen
42 minutes ago
- Ottawa Citizen
The two ways Trump's tariffs on Canada could collapse — despite his fight to keep them
Article content WASHINGTON, D.C. — Time's up. On Friday, U.S. President Donald Trump raised the tariff rate on Canadian goods not covered under the Canada-United States-Mexico Agreement (CUSMA) from 25 to 35 per cent, saying they 'have to pay a fair rate.' The White House claims it's because of Canada's failure to curb the 'ongoing flood of fentanyl and other illicit drugs.' U.S. Customs and Border Protection (CBP) data, however, show that fentanyl seizures from Canada make up less than 0.1 per cent of total U.S. seizures of the drug; most smuggling comes across the Mexican border. Article content Article content But the future of Trump's policy also rests on shaky ground, and the tariffs could come crashing down even if Canada can't reach a deal at some point. Imposed through a controversially declared 'national emergency' under the International Emergency Economic Powers Act (IEEPA), the tariffs come with essentially three paths for relief to Canadian exporters and their American customers: the courts and the economy. Article content Article content There is a big question hanging over whether Trump's tariffs are even legal under the U.S. Constitution, which gives Congress powers over trade. Trump has bypassed that by claiming he's using presidential IEEPA emergency powers. Article content On Thursday, the Washington, D.C.-based Federal Circuit Court of Appeals convened an en banc hearing for oral arguments in challenges to Trump's use of IEEPA. The 11 judges questioned whether the law meant for sanctioning adversaries or freezing assets during emergencies grants Trump the power to impose tariffs, with one judge noting, 'IEEPA doesn't even mention the word 'tariffs.'' The White House, meanwhile, says the law grants the president 'broad and flexible' emergency powers, including the ability to regulate imports. Article content Article content 'Based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing,' Thomas Berry, the CATO Institute's director of the Robert A. Levy Center for Constitutional Studies said in a statement. 'Several judges peppered the government's attorney with skeptical questions about why a broad term in IEEPA like 'regulate importation' should be read to allow the president to unilaterally impose tariffs.' Article content Article content Trump's lawyers claim his executive order provides the justifications for the tariffs — in Canada's case, fentanyl. But Berry said 'those justifications would not matter if IEEPA simply does not authorize tariffs in the first place. That is the cleanest and simplest way to resolve this case, and it appears that the Federal Circuit may be leaning toward that result.' Article content A decision is expected this month, and if it's a resounding pushback from the judges' panel, said Andrew Hale, a senior policy analyst at Heritage Foundation, the Supreme Court may not even take up the case. If so, he says, 'these Liberation Day tariffs and everything that's been imposed under emergency legislation, IEEPA, that all evaporates.'
Calgary Herald
42 minutes ago
- Calgary Herald
The two ways Trump's tariffs on Canada could collapse — despite his fight to keep them
WASHINGTON, D.C. — Time's up. On Friday, U.S. President Donald Trump raised the tariff rate on Canadian goods not covered under the Canada-United States-Mexico Agreement (CUSMA) from 25 to 35 per cent, saying they 'have to pay a fair rate.' The White House claims it's because of Canada's failure to curb the 'ongoing flood of fentanyl and other illicit drugs.' U.S. Customs and Border Protection (CBP) data, however, show that fentanyl seizures from Canada make up less than 0.1 per cent of total U.S. seizures of the drug; most smuggling comes across the Mexican border. Article content Article content But the future of Trump's policy also rests on shaky ground, and the tariffs could come crashing down even if Canada can't reach a deal at some point. Imposed through a controversially declared 'national emergency' under the International Emergency Economic Powers Act (IEEPA), the tariffs come with essentially three paths for relief to Canadian exporters and their American customers: the courts and the economy. Article content Article content There is a big question hanging over whether Trump's tariffs are even legal under the U.S. Constitution, which gives Congress powers over trade. Trump has bypassed that by claiming he's using presidential IEEPA emergency powers. Article content On Thursday, the Washington, D.C.-based Federal Circuit Court of Appeals convened an en banc hearing for oral arguments in challenges to Trump's use of IEEPA. The 11 judges questioned whether the law meant for sanctioning adversaries or freezing assets during emergencies grants Trump the power to impose tariffs, with one judge noting, 'IEEPA doesn't even mention the word 'tariffs.'' The White House, meanwhile, says the law grants the president 'broad and flexible' emergency powers, including the ability to regulate imports. Article content Article content 'Based on the tenor and questions of the arguments, it appears that the challengers have the better odds of prevailing,' Thomas Berry, the CATO Institute's director of the Robert A. Levy Center for Constitutional Studies said in a statement. 'Several judges peppered the government's attorney with skeptical questions about why a broad term in IEEPA like 'regulate importation' should be read to allow the president to unilaterally impose tariffs.' Article content Article content Trump's lawyers claim his executive order provides the justifications for the tariffs — in Canada's case, fentanyl. But Berry said 'those justifications would not matter if IEEPA simply does not authorize tariffs in the first place. That is the cleanest and simplest way to resolve this case, and it appears that the Federal Circuit may be leaning toward that result.' Article content A decision is expected this month, and if it's a resounding pushback from the judges' panel, said Andrew Hale, a senior policy analyst at Heritage Foundation, the Supreme Court may not even take up the case. If so, he says, 'these Liberation Day tariffs and everything that's been imposed under emergency legislation, IEEPA, that all evaporates.'
