Bloom Energy Stands Out Among Renewable Energy Stocks

Stocks to buy

Bloom Energy (NYSE:BE) stock might be worth a look.

The company specializes in large-scale fuel cells for consistent power generation and electrolyzers that split water into hydrogen and oxygen.

Its emphasis on standby hydrogen power sets them apart from rivals like Plug Power (NYSE:PLUG), which concentrates on hydrogen in mobility applications.

Bloom Energy faces challenges in hydrogen production economics, but it stands out with revenue from real projects rather than just subsidies.

Although profitability is still a concern for the company and others in the sector, BE stock showed consistent growth in revenue and earnings over the past four quarters. 

Let’s delve into Bloom Energy’s business model and learn more about the company.

Analysts Remain Bullish on BE Stock

BE stock currently inspires a “moderate buy” consensus rating from twelve analysts. Four suggest holding the stock, while eight recommend buying. The average 12-month price target among these analysts is $24.88.

The company’s executive vice president Guillermo Brooks recently sold 3,978 shares of Bloom Energy stock in July. They valued the sale at approximately $72,717.84. After the transaction, Brooks now owns 136,708 shares worth around $2,499,022.24. 

Institutional investors and hedge funds have made moves with their stakes in Bloom Energy. Comerica Bank acquired shares worth approximately $1,640,000, while GTS Securities LLC bought BE stock shares worth around $1,165,000 during the second quarter.

Bloom has slashed its operating losses by nearly 50% compared to last year, while also boosting its cash reserves to $767 million as of June end.

The company is expanding globally, recently selling 300 kilowatts of fuel cells to a German geothermal plant, marking a step towards European energy independence.

Over the long-term, investors betting on the need for various sources of renewable energy may consider companies like Bloom Energy.

Indeed, I believe the hydrogen space within the green energy realm is niche, and will require significant government spending and incentives to grow. However, we’ve seen some of these incentives materialize of late.

If Bloom Energy can translate this environment into profitable growth, this stock has plenty of upside from here.

What Now

Bloom Energy’s specialization in solid-oxide hydrogen fuel cells provides investors with a significant upside, given the size of the total addressable market Bloom is shooting for.

If Bloom can continue growing its revenue at a 23.8% clip, as it did this past quarter on a year-over-year basis, perhaps there’s something here.

Personally, I won’t touch renewable energy stocks that haven’t proven their ability to produce consistent profitability.

That’s the case with Bloom right now. However, I can’t fault long-term growth investors by being intrigued by the company’s overall prospects. In that regard, this stock may warrant a speculative buy. In my case, BE stock is on the watch list.

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 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.