Plug Power (NASDAQ:PLUG) on Tuesday was cut to Hold from Buy at financial-services firm Clear Street, with analysts citing stretched valuation following a sharp run-up in the stock. Shares have surged more than 170% over the past month, far outpacing the Russell 2000’s 3% gain in the same period.
Leadership transition
The downgrade comes as Plug Power (NASDAQ:PLUG) announced a leadership shake-up. Longtime CEO Andy Marsh, who has led the hydrogen fuel cell company for nearly 18 years, will step down in March 2026 to become executive chair. Jose Luis Crespo, currently chief revenue officer, will assume the CEO role next spring and take over as president this week. Analysts highlighted Crespo’s international experience as an asset, but also cautioned that the sudden resignation of President Sanjay Shrestha introduces transition risk.
Growth outlook
Clear Street continues to see long-term growth drivers for Plug Power (PLUG), including opportunities in hydrogen for refineries, ammonia production, and eventually data centers in Europe, where hydrogen infrastructure is more advanced than in the U.S. However, the firm does not expect meaningful data center revenue until 2026 or later. For 2025, it forecasts revenue of $719 million, rising to $1.13 billion by 2027, alongside narrowing losses.
Cash burn and valuation
Plug Power’s (PLUG) heavy investment cycle has weighed on profitability, but Clear Street analysts led by Tim Moore said they expect cash burn to ease to $491 million in 2025 from more than $1 billion last year as plant construction slows. Still, with shares trading around $4 against a $3.50 price target, Clear Street argued that “valuation is not ideal here,” noting its target is based on 4x enterprise value-to-sales, in line with Plug’s (PLUG) three-year average.
The report flagged multiple risks, including potential shifts in U.S. clean hydrogen incentives under a new administration, execution challenges in scaling projects, reliance on large customers such as Walmart, and ongoing funding needs amid persistent losses.
Clear Street said it remains constructive on Plug Power’s (PLUG) role in the energy transition, particularly its installed base in material handling that has already displaced more than 500 megawatts of grid demand. But after the recent rally, analysts believe much of the near-term optimism is priced in, justifying the rating change.