Why BE Stock Could Be a Big Beneficiary of the Clean Energy Revolution

Chris MacDonald
3 min read
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Bloom Energy (NYSE:BE) stock stands out in the clean energy sector with a strong ESG score of 8.8% and analyst favor.

While not consistently profitable, it recently posted a quarter with earnings per share of five cents, suggesting potential for future profitability as revenue continues to grow year-over-year. Let’s delve into the details and discuss why BE stock is one energy play you should bet on now.

A Closer Look at BE Stock

Bloom Energy showed a notable 42% increase this month. Despite recent market cap growth of $486 million, the stock has declined by 45% over the past three years, warranting investigation into the reasons behind the loss.

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Despite Bloom Energy’s lack of current profitability, it exhibited impressive revenue growth at 21% annually over three years, surpassing many other non-profitable firms. However, shareholders experienced a 13% annual decline in share price, potentially due to growth falling short of expectations.

In its third quarter report, Bloom Energy Corp. posted a loss of $169 million, equivalent to 80 cents per share. Adjusted earnings, accounting for one time costs and stock option expense, reached 15 cents per share, surpassing the expected loss of 3 cents per share by nine analysts surveyed by Zacks Investment Research.

Bloom Energy, the fuel cell systems developer, reported Q3 revenue of $400.3 million, exceeding the expected $362.8 million by eight analysts. The company expects full-year revenue between $1.4 billion and $1.5 billion.

Year-to-date, Bloom Energy shares fell 48%, closing at $10.03 on November 8, marking a 49% decline over the past 12 months.

Progress and Growth

Bloom Energy primarily sells fuel cells for commercial and utility-scale use, characterized by long lead times and strong demand. While not achieving rapid revenue growth, the company maintains a steady financial pace.

Excluding impairment charges, its non-GAAP gross margin reached 31.6%, and operating expenses decreased to $98.5 million in the latest quarter. As competitors face challenges, Bloom Energy’s financial performance is expected to persistently improve alongside technological advancements.

Bloom Energy stands out as a top choice in the growing hydrogen market, showcasing potential despite current profitability challenges. Noteworthy advancements in revenue and margins, coupled with leading-edge technology, position Bloom Energy favorably.

The company’s electrolysis focus holds significant promise, particularly in addressing the demand for storing intermittent renewable energy with hydrogen. However, caution is warranted, as sustained positive free cash flow is crucial for long-term viability, a lesson observed in Plug Power’s experiences.

Buy BE Stock Now

Bloom Energy’s solid oxide fuel cell technology gains traction across industries, projecting a positive outlook for revenue and cash flow growth amidst the increasing demand for hydrogen fuel cells. Analysts, per TipRanks, indicate a promising trajectory with a moderate buy rating and a significant 35% upside potential.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

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