Bloom Energy Corporation (BE) designs, manufactures, and sells solid-oxide fuel cell systems for on-site power generation. It offers Bloom Energy Server, a stationary power generation platform that converts standard low-pressure natural gas or biogas into electricity through an electrochemical process without combustion.

The company has been able to capitalize on the growing clean energy trend this year because it has sufficient resources to meet a significant portion of the demand for sustainable energy, particularly in the commercial and industrial sectors.

BE has been serving its customers through ground-breaking innovation and access to leading technologies. This has allowed the stock to gain 336.7% over the past year. This impressive performance combined with several other factors has helped BE earn a “Buy” rating in our proprietary rating system.

Bloom Energy was formerly known as Ion America Corp. and changed its name to Bloom Energy Corporation in September 2006. The company was founded in 2001 and is based in Sunnyvale, California.

Here is how our proprietary POWR Ratings system evaluates BE:

Trade Grade: A

BE is currently trading above its 50-day and 200-day moving averages of $24.29 and $17.19, respectively, indicating that the stock is in an uptrend. In fact, the stock’s 61% gains over the past three months reflect solid short-term bullishness.

BE’s revenues have increased 6.6% sequentially to $200.30 million in the third quarter ended September 30, 2020. Its non-GAAP operating income has increased 152.5% year-over-year to $15.40 million over the same period, while EPS has improved 66.7% year-over-year.

On November 18, BE and SK Engineering and Construction (SK E&C) won a competitive bid under the RE100 program to supply 100% hydrogen-powered Solid-Oxide Fuel Cells (SOFC) and Electrolyzers to an industrial complex in Changwon, Korea. This will help  BE to establish its dominance in the foreign markets.

Buy & Hold Grade: B

In terms of proximity to its 52-week high, which is a key factor that our Buy & Hold Grade considers , BE is well positioned. The stock is currently trading 11.9% below its 52-week high of $31.58.

The company’s net revenue over the past three years has grown at a CAGR of 33.6%. This can be attributed to the company’s strong growth in making clean energy affordable and reliable.

Peer Grade: C

BE is currently ranked #27 of 59 stocks in the Industrial – Equipment Industry. Other popular stocks in this industry are Emerson Electric Company (EMR), Parker-Hannifin Corporation (PH) and Fastenal Company (FAST).

EMR, PH and FAST have gained 7.1%, 31.7%, and 39.1%, respectively year-to-date. This compares to BE’s 272.4% returns over this period.

Industry Rank: B

The Industrial – Equipment Industry is ranked #49 of the 123 StockNews.com industries. The companies in this industry offer precision parts, products, and systems for applications serving markets, such as transportation, industrial equipment, consumer products, packaging, electronics, medical devices, energy, and healthcare industries.

The industry was severely impacted by the COVID-19 outbreak. Manufacturers were able to prioritize building a resilient supply chain and increased spending on IT infrastructure and automation technologies to enable them to maintain optimum production levels while minimizing risk to their employees. Also, with coronavirus  vaccines receiving regulatory approval for emergency use, this industry is well-positioned to reach highs over the next couple of months.

Overall POWR Rating: B (Buy)

BE is rated “Buy” due to its impressive past performance, short-term bullishness, and solid price momentum, as determined by the four components of our overall POWR Rating.

Bottom Line

Despite appreciating  more than 270% so far this year, BE has the potential to grow further based on its continued business growth, favorable earnings and revenue outlook, and price momentum.

Analyst sentiment, which gives a good sense of a stock’s future price movement, is impressive for BE. It has an average broker rating of 1.9, indicating favorable analyst sentiment. Of nine Wall Street Analysts that rated the stock, three  rated it “Buy.” Analysts expect BE’s revenues to rise 5.2% year-over-year to $224.91 million in the current quarter (ending December 31, 2020). The consensus EPS estimate for the ongoing quarter indicates a 92.9% rise from the year-ago value. This outlook should keep BE’s price momentum alive in the near term.

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BE shares rose $0.14 (+0.49%) in after-hours trading Wednesday. Year-to-date, BE has gained 280.32%, versus a 17.73% rise in the benchmark S&P 500 index during the same period.

About the Author: Rishab Dugar

Rishab is a financial journalist and investment analyst. His investment approach is to focus on quality stocks, trading at low prices, with business models that he readily understands. More...

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