Bloom Energy Corporation

BE Details

The mission of Bloom Energy Corporation (NYSE: BE) revolves around making clean, reliable energy affordable for everyone in the world.

Financial Results for Second Quarter Ended June 30, 2021

• Revenue of the company amounted to $228.5 Mn in Q2 FY 2021, implying a rise of 21.6% as compared to the revenue of $187.9 Mn in the second quarter of 2020.
• The company’s product revenue was $146.9 Mn in Q2 FY 2021, reflecting a rise of 26.4% from the second quarter of 2020. This was mainly driven by the 41.5% rise in the acceptances.
• Gross margin of the company stood at 16.3% in Q2 FY 2021, a rise of 2.3 percentage points as compared to the gross margin of 14.0% in Q2 FY 2020. This was primarily driven by the improved product cost as well as favorable sales mix from growth in the product and electricity.

Key Data (Source: Company Reports)

Recent Update:

BE has recently made an announcement about the appointment of Edward Vallejo as vice president, investor relations. In the role, Vallejo would be focusing towards articulating the company’s values, interests, as well as positions to the investment community.

Outlook:

The company has reaffirmed the outlook for the FY 2021. Its revenue is expected to be in the range of $950 Mn - $1 Bn and non-GAAP Gross Margin is expected to be ~25%. Its non-GAAP operating margin is expected to be ~3%. Notably, non-GAAP gross margin as well as non-GAAP operating margin exclude the stock-based compensation expense.

Key Risks:

The breach or failure of the networks or computer or data management systems could impact the company’s operations. Also, expansion of the operations internationally could pose additional risks.

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

Technical Overview:

Chart:

Source: REFINITIV

Note: Purple Color Line Reflects RSI (14-Period)

Stock Recommendation:  

The company’s cash position, including restricted cash, as of 30^th June 2021 stood at $400.5 Mn, as compared to $324.1 Mn as of 30^th June 2020. The stock of the company declined by ~31.5% in 3 months. It has made a 52-week low and high of $12.37 and $44.95, respectively.

The stock has been valued using an EV/Sales multiple-based illustrative relative valuation method 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 rise in the revenue in Q2 FY 2021 on the YoY basis as well as decent outlook.

Thus, we give a “Speculative Buy” recommendation on the stock at the current price of $18.58 per share, down by 7.56% on 28^th September 2021.

 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.