Plug Power (PLUG) recently captured investor attention when Chief Financial Officer Paul Middleton made a notable move by purchasing the company’s beaten-down stock in the open market. This insider transaction marks the first open-market purchase by a Plug Power executive in over six years, prompting many to wonder if Middleton’s investment signals a compelling buying opportunity for the stock.

Still, despite this seemingly bullish insider activity, Plug Power remains challenged by substantial regulatory and financial uncertainties. The recent shift in U.S. energy policy under President Donald Trump’s administration, including a potential repeal of crucial hydrogen production tax credits, casts significant doubt on the company’s future growth prospects and profitability timeline.

So, should investors follow Middleton’s lead and buy Plug Power shares, or do the risks outweigh the potential rewards? Let’s dive in and find out!

About Plug Power Stock

With a market cap of $841.1 million, Plug Power (PLUG) is a notable player in the green hydrogen industry, specializing in hydrogen fuel cell technologies. The company is building a comprehensive green hydrogen ecosystem, spanning production, storage, delivery, and energy generation, to support its customers’ business objectives and contribute to economy-wide decarbonization. Its offerings include the GenDrive fuel cell system for material handling vehicles such as forklifts, GenSure stationary fuel cells for grid support, and ProGen fuel cell engines designed for a range of applications. It also offers GenFuel, a comprehensive solution for hydrogen production, storage, and dispensing.

Shares of the ailing hydrogen fuel cell product solutions provider have plunged 63% on a year-to-date basis. 

U.S. Regulatory Challenges Present Major Headwind for PLUG

Last week, the U.S. House of Representatives passed U.S. President Donald Trump’s tax and spending bill, which includes a provision to eliminate the generous 45V clean hydrogen production tax credit. Trump’s “One Big, Beautiful Bill” passed along party lines with a 215-214 vote and now moves to the Senate for further debate, with a vote on approval expected by August. If finalized, the termination of the 45V credit would be a major blow to nearly all announced green hydrogen projects in the U.S.

The tax bill contains a provision to eliminate the Section 45V hydrogen production tax credit from the Inflation Reduction Act (IRA), which had been widely credited with jumpstarting the U.S. hydrogen industry. Under the bill, hydrogen projects beginning construction after Dec. 31, 2025, will no longer be eligible for the 45V credit, effectively stripping it of its long-term, broad-based impact. Currently, projects can receive up to $3 per kilogram of hydrogen produced, with eligibility extending through 2033. 

Many supporters of the hydrogen industry had hoped that Republicans from districts slated to host projects would oppose the measure. However, only two Republicans ultimately voted against the bill. With that, hydrogen lobbyists and advocates have issued strong warnings that repealing or weakening the 45V credit could have a “chilling effect” on the industry.

When it comes to Plug Power, the absence of tax credits would likely result in its hydrogen fueling business continuing to incur significant gross losses for years to come. Also, without tax credits, most third-party green hydrogen projects in the U.S. would likely be halted, further restricting Plug Power’s ability to sell electrolyzers and liquefaction equipment within the domestic market.

Meanwhile, Plug secured a nearly $1.7 billion loan guarantee from the U.S. Department of Energy (DOE) in early January to support the development of six zero- and low-carbon hydrogen production projects. However, the Trump administration has since placed the loan under review, effectively putting it on hold. If Trump revokes DOE funding, it could further delay Plug’s path to profitability or potentially push the company toward bankruptcy. Still, management stated that they are actively collaborating with the DOE to move the loan process forward.

Several analysts pointed out that for the company to recover, it must drive electrolyzer growth through international orders, reduce costs, and show improved gross margins. In the latest earnings call, management stated that their focus has shifted to Europe, expecting the region “to be a multi-gigawatt contributor to bookings and revenue over the next 18 to 24 months with meaningful margin contribution.” However, PLUG has had a presence in the European market for several years with limited success, largely due to intense local competition and weak execution.

CFO Middleton Loads Up on Plug Power Stock 

Despite aforementioned challenges, Plug Power’s Chief Financial Officer Paul Middleton recently purchased the company’s beaten-down shares, signaling his confidence in Plug’s current strategy and its long-term potential to lead the hydrogen economy at scale. On May 16, Middleton purchased 350,000 shares at an average price of $0.7154, totaling an investment of around $250,000. Notably, Middleton’s purchase marks the first open market buy of Plug stock by an insider in over six years. The purchase was announced on May 19, contributing to the stock’s gain of over 2%.

“I remain confident in Plug’s long-term strategy and the opportunities ahead as we continue to execute our vision in the hydrogen economy,” said Middleton. “This purchase reflects my belief in the company’s financial strength and growth potential.”

How Did Plug Power Perform in Q1?

On May 12, Plug Power reported earnings results for the first quarter of 2025. The company delivered revenue of $133.7 million, up 11.1% year-over-year. The growth was primarily fueled by higher electrolyzer deliveries, continued demand in material handling, and ongoing deployments within its cryogenic platform. The top-line figure aligned with the company’s guidance and exceeded Wall Street’s consensus estimate by $1.88 million.

PLUG also reduced its gross margin loss in Q1, aided by ongoing supply chain optimization, continued cost-cutting efforts, price increases, and progress in scaling its hydrogen platform. As a result, gross margin loss improved significantly, narrowing from -132% in the same quarter last year to -55%. Notably, during the Q1 earnings call, management walked back its earlier projection of achieving positive gross margins in Q4 2025 and is now targeting breakeven levels by year-end. The company reported net loss per share of $0.21, missing expectations by $0.02.

Meanwhile, the company increased its hydrogen production capacity to 40 tons per day across three active plants and achieved significant growth in its electrolyzer and fuel cell segments during Q1, further solidifying its status as a global leader in the clean hydrogen economy.

In terms of liquidity, cash and cash equivalents rose from $205.7 million at the end of 2024 to $295.8 million in Q1. It’s worth noting, however, that shareholder dilution enabled the company to replenish its declining cash reserves and add much-needed liquidity. Although cash burn dropped 50% year-over-year to $152.1 million in Q1, it remains significant in absolute terms. After the quarter ended, Plug Power secured a costly debt facility of up to $525 million with its existing lender, Yorkville Advisors.

Looking ahead, management forecasts Q2 revenue to fall between $140 million and $180 million, with further improvements in gross margin and working capital performance expected over the remainder of 2025.

Analysts tracking the company expect its net loss to narrow by 78.01% year-over-year to $0.59 per share for fiscal 2025, while the top line is estimated to grow 16.40% year-over-year to $731.95 million. Notably, current projections indicate that PLUG is not expected to achieve profitability until fiscal 2030. However, without the hydrogen production tax credit, the path to profitability will likely be delayed even further. 

Options Market Sentiment on PLUG Stock

Looking at the option chain for June 20, 2025, the $1.0000 CALL option has a bid/ask spread of $0.0500/$0.0600, while the $1.0000 PUT option displays a spread of $0.2400/$0.3200. Please note that this option strike is closest to the current stock price. Now, let’s determine the expected price movement using the midpoint prices of these options:

0.2800 (1.0000 put) + 0.0550 (1.0000 call) = 0.3350/0.7800 = 42.9%

Based on current prices, the options market suggests that PLUG stock could see a movement of about 43% by June’s options expiration from the $1.0000 strike price using the long straddle strategy. That would place the stock in a trading range of $0.45 to $1.12.

Notably, at the $1.0000 strike price, open interest in call options stands at 31,388, surpassing the 18,347 open put options. At first glance, the options market sentiment may appear bullish. However, the total dollar value of open puts significantly exceeds that of open calls, which, in my view, indicates a bearish sentiment.

What Do Analysts Expect for PLUG Stock?

Wall Street analysts maintain a cautious stance on Plug Power stock, as reflected in the consensus “Hold” rating. Of the 24 analysts covering the stock, six rate it a “Strong Buy,” 13 suggest holding, and the remaining five take a more bearish view with a “Strong Sell” rating. Still, the average price target for PLUG stock is $1.96, which indicates massive upside potential of 151.3% from current levels.

The Bottom Line on PLUG Stock

All things considered, I don’t believe investors should follow CFO Middleton’s move and buy PLUG stock, as the company faces major regulatory hurdles that could severely impact its path to profitability — or worse. 

Even if the hydrogen production tax credit remains in place, the company is not expected to achieve profitability until fiscal year 2030, leaving its liquidity outlook uncertain. Although Plug seems to have enough liquidity to get through the rest of the year, its low share price significantly restricts its ability to raise additional capital through equity offerings without causing substantial dilution for existing shareholders. With that, the risk-reward profile of PLUG stock is not attractive to me.

On the date of publication, Oleksandr Pylypenko did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.