Plug Power Inc. (PLUG) had a rough Wednesday, with shares sinking more than 15% after the hydrogen fuel cell company announced it's raising $375 million through a private offering of convertible senior notes. The convertible debt, which matures in 2033, was announced shortly after Tuesday's market close and immediately sent the stock lower in after-hours trading.

JP Morgan analyst Bill Peterson maintained a neutral rating on Plug Power while pulling his price forecast entirely. But here's the thing—Peterson actually thinks this debt move makes sense. The company plans to use the fresh capital to retire $243 million worth of crushing 15% high-cost debt and buy back some of its 2026 convertible notes. That's classic balance sheet cleanup.

Why the Caution?

Peterson's neutral stance reflects a wait-and-see approach while the company works toward hitting key financial milestones, particularly around profitability and reducing its cash burn. While Plug Power has shown improved operational momentum and strategic direction over the past year, the analyst wants to see consistent execution on margin improvements and liquidity targets before getting more optimistic.

What Management Is Saying

The analyst also shared insights from Plug Power's 2025 Symposium, where management doubled down on its fiscal 2025 and 2026 projections. The company expects significant quarter-over-quarter and year-over-year margin improvements on an adjusted basis, excluding some hefty non-cash charges from Q3 2025.

The margin gains should come from higher sales volume, a better equipment mix, improved fixed-cost absorption, and stronger contribution margins on equipment sales. Peterson notes that the year-end 2026 guidance anticipates EBITDAS turning positive, driven by roughly $300 million in Q4 fiscal 2026 sales—well above both JP Morgan's pre-call estimate of $244 million and consensus expectations of $251 million. Gross margins are projected at 15%, compared to consensus estimates ranging from negative 3% to positive 8%.

The fiscal 2025 EBITDAS guidance excludes stock-based compensation, which runs about $12 million quarterly in fiscal 2025 versus roughly $20 million in fiscal 2024. This supports management's roadmap toward EBIT profitability in fiscal 2027 and net income profitability in 2028, as laid out at last year's symposium.

The Growth Story

Looking forward, Peterson expects growth to be supported by the 2026 renewal of investment tax credits, continued fleet upgrades, and capacity expansion from major customers. Greenfield projects offer additional upside by sidestepping the costs of legacy electrical infrastructure.

PLUG shares closed Wednesday down 15.65% at $1.805.