Up 7% Last Week, What’s Next For Bloom Energy Stock?

by Trefis Team
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The stock price of Bloom Energy (NYSE:BE), a company best known for its modular fuel cell generators targeted at commercial and industrial users, has seen its stock rally by about 7.4% over the last week (five trading days). The S&P 500 was up by about 2% over the same period.  The recent gains in Bloom Energy stock come as California passed a new bill that includes a two-year extension of the Fuel Cell Net Energy Metering program. This is a positive development given that California is one of the largest markets for Bloom’s Energy Servers. However, Bloom stock remains down by about 4.4% over the last month (21 trading days), due to broader market declines.

Now, is BE stock poised to grow? Based on our machine learning analysis of trends in the stock price over the last three years, there is a roughly equal chance of a rise or a decline in BE stock over the next month (twenty-one trading days). See our analysis on Bloom Energy Chance Of Decline for more details.

Five Days: BE 7.4%, vs. S&P 500 2%; Outperformed market

(31% Event Probability)

  • Bloom stock rose 7.4 % over a five day trading period ending 9/27/2021, compared to the broader market (S&P500) which rose by 2%
  • A change of 7.4% or more over five trading days has a 31% event probability, which has occurred 243 times out of 793 times in the last three years.

Ten Days: BE -0.5%, vs. S&P500 -1%; Outperformed market

(47% event probability)

  • Bloom stock declined -0.5% over the last ten trading days (two weeks), compared to the broader market (S&P500) decline of -1%
  • A change of -0.5% or more over ten trading days has a 47% event probability, which has occurred 372 times out of 788 times in the last three years. 

Twenty-One Days: BE -4.4%, vs. S&P 500 -1%; Underperformed Market

(42% event probability)

  • Bloom stock declined -4.4% over the last twenty-one trading days (one month), compared to the broader market (S&P500) decline of -1%.
  • A change of -4.4% or more over twenty-one trading days has a 42% event probability, which has occurred 328 times out of 777 times in the last three years.

Looking for more details on Bloom Energy’s financial performance in recent years? Check out our dashboards on Bloom Energy Revenue for more details.

[6/4/2021] What’s Happening With Bloom Energy Stock?

Bloom Energy (NYSE:BE) – a company best known for its modular fuel cell generators targeted at commercial and industrial users – has seen its stock rally by about 8% over the last five trading days, although it remains down by about 10% year-to-date. Below is an overview of some of the recent developments for Bloom and what the outlook could be like for the company.

Bloom published its Q1 2021 results in early May, indicating that sales rose by 24% year-over-year to $194 million, with its acceptances (a measure of the company’s unit sales) standing at 359, up from 256 last year. The company also reiterated its guidance for FY’21, projecting revenues of between $950 million and $1 billion. Adjusted gross margins are projected to stand at 25%, up from around 23% last year, indicating that the economics of Bloom’s business of selling, installing, and servicing fuel cells are slated to get better.

Separately, Bloom signed an agreement with Idaho National Laboratory to test the use of nuclear energy to generate clean hydrogen via its solid oxide, high-temperature electrolyzer. Nuclear plants generate a relatively stable electricity output throughout the day, irrespective of demand which typically varies. Now the excess electricity generated via nuclear plants can be used for the process of electrolysis, using water to produce hydrogen gas that can be stored and used later by fuel cells to produce electricity. If the experiment proves viable, it could be positive for Bloom and other fuel cell makers.

So what’s the longer-term outlook like for Bloom Energy? Governments worldwide are getting more serious about fighting climate change and providing incentives for renewable energy. Fuel cells, which help to lower greenhouse gas emissions, are seen as an increasingly viable option for tackling climate change. We think Bloom stock is fairly valued at current levels of around $25 per share. The stock trades at about 4.5x projected 2021 revenues, well below rival FuelCell Energy (NASDAQ: FCEL), which trades at about 40x forward revenues. Growth rates are also likely to be stronger, with sales projected to rise by around 25% in 2021, compared to just about 11% for FuelCell.

Our theme of Hydrogen Economy Stocks includes the stocks of U.S.-based companies that sell fuel cells, renewable energy equipment, and supply hydrogen gas.

[1/6/2021] Pick Bloom Energy Over FuelCell 

The stocks of hydrogen and fuel cell makers fared well last year, driven by increasing interest in clean energy, the recent extension of tax credits for fuel cell projects, and the election of Democrat Joe Biden to the U.S. presidency – who has proposed to spend as much as $2 trillion on fighting climate change. Bloom Energy (NYSE:BE) and FuelCell Energy (NASDAQ: FCEL), two well-known names in the fuel cell market, saw their stock prices soar by 3.5x and 5x, respectively, over 2020. Let’s take a look at the two companies a little more closely to find out which could be the better pick for investors. See our analysis Bloom Energy vs. FuelCell Energy: BE stock looks very undervalued compared to FCEL stock for more details on how the financial and valuation metrics for the two companies compare.

Bloom Energy sells solid oxide fuel cell generators called Bloom Energy Servers which generate electricity from natural gas or biogas via an electrochemical process without combustion. These servers essentially replace diesel generators in commercial and industrial uses and help to cut carbon dioxide pollution by over two-thirds. While FuelCell Energy (NASDAQ: FCEL) also designs and manufactures fuel cells, the company’s focus has been on larger fuel-cell power plants. The company’s systems are bulkier and less flexible compared to Bloom’s.

Bloom’s Revenues have expanded from around $366 million in 2017 to about $758 million over the last 12 months, driven by growing installations of its servers. For instance, with power outages and wildfires in recent years in California, companies started to work with Bloom’s products. FuelCell, on the other hand, has seen its revenue decline from around $96 million to $65 million over the same period, as its product revenues collapsed although it continues to earn revenue from some legacy power generation contracts as well as service and licensing Revenue. Bloom has also reduced its losses, with Operating Margins improving from about -46% to about -17.5% between 2017 and the last 12 months. FuelCell on the other hand has seen its margins deteriorate from -47% to about -85% in the same period.

Now let’s look at the relative valuation of the two companies. FuelCell Energy trades at a much higher price to sales multiple of 40x, compared to about 5x for Bloom. This doesn’t make sense, considering that both companies operating in the same industry with Bloom apparently working with superior technology. Moreover, Bloom has more than doubled its Revenue since 2017, while FuelCell has seen sales decline by about one-third over the same period. Considering this, we think that Bloom Energy is currently the better pick of the two stocks.

[12/11/2020] Stocks To Play The Hydrogen Economy

Interest in clean energy stocks has soared this year, driven by low-interest rates, improving economics, and the election of Democrat Joe Biden – who has proposed to spend as much as $2 trillion on fighting climate change – to the U.S. presidency. While solar and electric vehicle stocks have been the most high profile winners, another theme that appears to have caught investors’ interest is the concept of the “hydrogen economy” or the use of hydrogen as a fuel for transportation and other energy requirements, replacing fossil fuels.

Hydrogen burns much cleaner than petroleum-based fuels and can be produced using just water and energy or from hydrogen-rich gases such as methane. Hydrogen is also seen as a means of storing excess renewable electricity – as the electricity can be used to run a process of electrolysis, which converts water into hydrogen. Our theme of Hydrogen Economy Stocks includes the stocks of U.S. based companies that sell fuel cells, renewable energy equipment, and supply hydrogen gas. Below is a bit more about the companies in our theme and how they fit into the broader picture of the Hydrogen Economy.

Bloom Energy (NYSE:BE) sells solid oxide fuel cell generators called Bloom Energy Servers that use natural gas or biogas as fuel via an electrochemical process without combustion. The company also develops hydrogen fuel cells – that use only hydrogen gas as fuel. The stock is up 245% year-to-date.

FuelCell Energy (NASDAQ: FCEL) is a company that designs and manufactures carbonate and solid oxide fuel cells that run on hydrogen-rich fuels such as natural gas and biogas. The company also operates over 50 fuel cell power plants across the world. The stock is up 229% year-to-date.

Air Products and Chemicals (NYSE: APD), a company that sells gases and chemicals for industrial uses, is one of the world’s largest producers of hydrogen. Earlier this year, the company outlined plans to build a sizable hydrogen plant powered by 4 Gigawatts of renewable electricity in Saudi Arabia. The stock is up 14% year-to-date.

First Solar (NASDAQ:FSLR) is the largest U.S.-based solar panel manufacturer. Solar players could also stand to gain from the hydrogen economy as hydrogen can be produced from water by a process of electrolysis, using solar-generated electricity. Solar power typically sees intermittent production and supply-demand mismatches, so excess power could be “stored” in hydrogen. The stock is up 55% year-to-date.

Cummins (NYSE: CMI) – an industrials company best known for its engines and power generation products – has been working on hydrogen-based technologies for almost two decades. The company acquired Hydrogenics, a leading Canadian hydrogen fuel cell player last year. The stock is up 23% year-to-date.

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