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With the business potentially at an important milestone, we thought we'd take a closer look at Bloom Energy Corporation's (NYSE:BE) future prospects. Bloom Energy Corporation designs, manufactures, and sells solid-oxide fuel cell systems for on-site power generation in the United States, Japan, China, India, and the Republic of Korea. With the latest financial year loss of US$158m and a trailing-twelve-month loss of US$118m, the US$3.4b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Bloom Energy will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.
Consensus from 15 of the American Electrical analysts is that Bloom Energy is on the verge of breakeven. They anticipate the company to incur a final loss in 2022, before generating positive profits of US$49m in 2023. Therefore, the company is expected to breakeven roughly 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 73%, which signals high confidence from analysts. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving Bloom Energy's growth isn’t the focus of this broad overview, but, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
Before we wrap up, there’s one issue worth mentioning. Bloom Energy currently has a debt-to-equity ratio of over 2x. Typically, debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk in investing in the loss-making company.
This article is not intended to be a comprehensive analysis on Bloom Energy, so if you are interested in understanding the company at a deeper level, take a look at Bloom Energy's company page on Simply Wall St. We've also compiled a list of relevant factors you should further research:
Valuation: What is Bloom Energy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Bloom Energy is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Bloom Energy’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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