Easy come, easy go. One month ago, Bloom Energy(NYSE: BE) stock soared 11% in a day after reporting strong sales (but a big GAAP loss) in its Q2 2024 earnings report. Today, the fuel cell stock is moving in the opposite direction, down 11.7% through 10:05 a.m. ET.
You can blame investment bank Jefferies for that.
Downgrading Bloom Energy stock
In a note covered on StreetInsider.com, Jefferies analyst Lloyd Byrne took Bloom Energy management to task today for giving investors "minimal transparency" surrounding its 2023 announcement of a deal to sell 500 megawatts' worth of Bloom fuel cell boxes to Korea's SK Group -- and generate $4.5 billion in revenue for Bloom over the next 20 years.
The value of the deal comes to roughly three times Bloom's 2023 revenue, according to data from S&P Global Market Intelligence. Yet nine months after the announcement, Jefferies worries it's still not clear how the deal is progressing. Additionally, Byrne cited worries about the size of Bloom's backlog, and (though this factor is out of Bloom's control) the risk of federal tax credits for fuel cells expiring after this year.
Jefferies downgraded Bloom to hold today and is dialing down the optimism on Bloom, lowering sales forecasts for 2025 and 2026 by 15% and 25%, respectively.
Is Bloom Energy stock a buy?
And yet, this is just one analyst's opinion. Bloom itself isn't dialing anything down.
On the contrary, in its August report, management forecast full-year sales of between $1.4 billion and $1.6 billion in 2024, which is actually above analyst estimates. Management further forecast an increase of about 6 percentage points in gross profit margins and predicted its non-GAAP (adjusted) operating profits will turn positive this year at anywhere from $75 million to $100 million.
If Bloom's right about that -- and Byrne is wrong -- then Bloom could be on track to report an honest-to-goodness GAAP profit in 2025. Perhaps not enough of a profit to technically justify the stock's $2.5 billion market capitalization -- but maybe enough to gin up some enthusiasm for the stock again.
Should you invest $1,000 in Bloom Energy right now?
Before you buy stock in Bloom Energy, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Bloom Energy wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $656,938!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. TheStock Advisorservice has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of September 3, 2024
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Jefferies Financial Group. The Motley Fool has a disclosure policy.
