Bloom Energy Corporation

Bloom Energy Corporation (NYSE: BE) is an energy company that provides a solid oxide platform for distributed generation of electricity and hydrogen.

Result Performance for FY21 and Q4FY21

• The Group posted impressive performance during FY21 and clocked revenues of ~$1 billion during the year. The revenue has been driven by the demand for clean energy and the want for low-carbon products. Revenues during Q4FY21 stood at $342.5 million, reflecting an increase of 37.3% on the prior corresponding period.
• The company ended the period with a record-ending backlog of 6,549 systems in Q4FY21, compared to 1,994 in the prior corresponding period end.
• GAP Gross margin stood at 20.3% in FY21, compared to 20.9% in FY20.
• Cash flows from operating activities improved to $47.2 million in Q4FY21, compared to a negative $18.7 million in the prior corresponding quarter.
• The cash position stood at $615.1 million as of 31 December 2021, compared to $416.7 million as of 31 December 2020.

Source: Company Reports, Analysis by Kalkine Group

• As per an update on 03 May 2022, the company’s Electrolyzer has been recognized by Fast Company’s 2022 World Changing Ideas Awards.
• The company has updated that it will release its Q1FY22 results on 05 May 2022, after market close.
• On 21 April 2022, the company has partnered with EQT and purchased certificates for all of its U.S. fleet’s natural gas consumption for the next two years from EQT.
• The Group updated about the expansion of strategic partnership with SK ecoplant Co., Ltd. In Q4FY21. This will enable the acceleration of hydrogen commercialization and will witness the recognition of 450 MW of equipment backlog over the next three years.

Outlook

The company has increased its long-term revenue growth outlook to 30-35% over the next 10 years. In FY22, it expects the revenue to be in the range of $1.1-$1.15 billion and anticipates cash flow from operations to be positive. Non-GAAP gross margin is expected at ~24% during FY22.

Key Risks

The company is exposed to the risks of manufacturing defects, and potential delays in the development and commercialization of new products. There are also macro-economic concerns lingering due to the global pandemic and geopolitical tensions.

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

Technical Overview:

Daily Price Chart

Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)

Stock Information                                      

The company has delivered a 1-month return of ~-29.3%. The stock is trading lower than the average of the 52-week high price of $37.01 and the 52-week low price of $12.55.

The stock has been valued using an EV/Sales multiple-based illustrative relative valuation, and the target price so arrived reflects a rise of low double-digit (in % terms). A slight premium has been applied to EV/Sales Multiple (NTM) (Peer Average), considering the impressive financial performance, optimistic long-term outlook, and deployment of products.

Considering the aforementioned factors along with growth in top-line, a “Speculative Buy” recommendation has been assigned on the stock at the current market price of $ 18.53 per share, as on 9.50 am New York Time, USA (GMT-4) as of 03 May 2022.

Bloom Energy Corporation is a part of Kalkine’s Global Fully Charged Portfolio

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.

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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.