Company Overview: Bloom Energy Corporation (NYSE: BE) is engaged in building solid oxide fuel-cell-based power generation platform for commercial use for providing clean and resilient power to essential services, businesses, and critical infrastructure.

­­­­­­BE Details

Material Business Updates

Figure 1: Key Media Releases

Source: Company Reports, Analysis by Kalkine Group

Historical Financial Trend:

BE demonstrated sustainable top-line growth while keeping the value proposition intact. Normalised EBITDA loss has shrunk considerably from FY19 levels, directing towards positive territory. Operating revenues grew at a 27.7% CAGR (FY17 – FY21).

Figure 2: Historical Financial Overview

Source: Company Reports, Analysis by Kalkine Group

Full-Year FY20 Performance:

Figure 3: Annual Performance

Source: Company Reports, Analysis by Kalkine Group

Top 10 Shareholders:

The top 10 shareholders together form ~40.77% of the total shareholding. Columbia Threadneedle Investments (US) and The Vanguard Group, Inc. holds a maximum stake in the company at ~­­­12.54% and ~7.77%, respectively.

Figure 4: Top 10 Shareholders

Source: Analysis by Kalkine Group

Key Metrics:

Improved product acceptance and consequent inflow from growth in installation base has promoted top line. Subsequently gross profits entered expansionary territory with a steady upward movement. Current ratio moved close to FY17 levels, supporting liquidity position.

Figure 5: Key Financial Metrics

Source: Analysis by Kalkine Group

Outlook:

Source: Company Reports, Analysis by Kalkine Group

Key Risks:

BE’s Energy Servers holds substantial upfront costs; hence, there stands high requirement for attracting investors to support consumer finance purchases. The power generation industry may not receive widespread market acceptance.

Valuation Methodology: EV/Sales Multiple Based Relative Valuation (Illustrative)

Stock Recommendation:

Performance Details: BE has delivered 3-month and 6-month returns of ~+14.804% and ~+23.517%, respectively. The stock is trading below the average of the 52-week high price of US$24.21 and the 52-week low price of US$22.58.

Valuation Rationale: Considering the bottom-line in negative zone and high competition in clean energy business, the stock might trade at a slight discount. For valuation, a few peers like Emerson Electric Co (NYSE: EMR), Hubbell Inc (NYSE: HUBB), Capstone Green Energy Corp (NASDAQ: CGRN), and others have been considered.

Investment Rationale: Considering the current trend in contract build-up, decent financial status, consistent top-line growth, current trading levels, and potential upside, we give a “Speculative Buy” recommendation at the closing market price of $23.11, down by ~3.47%, as of 21 March 2022.

Markets are currently trading in a highly volatile zone due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

BE Daily Technical Chart (Source: REFINITIV)

Note 1: The reference data in this report has been partly sourced from REFINITIV

Note 2: Investment decisions should be made depending on the investors’ appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the analysis has been achieved and subject to the factors discussed above alongside support levels provided.

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.