Bloom Energy Corporation

BE Details

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

Financial Results for the Quarter Q1FY22

• The Group posted revenue of $201.0 mn in Q1FY22, compared to revenues of $194.0 mn in Q1FY21. It also maintained a decent commercial pipeline.
• Gross margin declined to 13.9% in Q1FY22, compared to 28.2% in Q1FY21.
• Net loss during the period stood at $82.74 mn, owing to higher operating expenses.
• It ended the period with a cash position of $286.0 mn as of 31 March 2022, compared to $396.03 mn as of 31 December 2021.

Key Updates

• On 20 July 2022, the Group announced the new opening of its multi-gigawatt Fremont, California manufacturing plant. The plant is expected to provide hundreds of new clean energy jobs to the region.
• The company is expected to announce its Q2 FY22 results on 09 August 2022.

Outlook

The company has reaffirmed its full-year 2022 outlook and expects the revenue to be in the range of $1.1 - $1.15 bn. It also anticipates non-GAAP gross margin to be around 24% and operating margin around 1%. Further, it also expects the cash flow from operations to be positive during the year. The Group has $493.9 mn in cash to fund its near-term investments and is on track to add a gigawatt of capacity by 2023.

Key Risks

The company is exposed to the risks of manufacturing defects, and potential delays in the development and commercialization of new products. The Group’s net loss position is also a concern further exaggerated by inflation pressures.

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

Stock Recommendation

Over the last one month, the stock has given a return of ~28.34%. The stock is trading lower than the average price of 52-week low-high range for the stock at $37.01-$11.47, respectively.

The stock has been valued using an EV/Sales multiple-based illustrative relative valuation, and the target price so arrived reflects a fall of low double-digit (in % terms). A slight premium has been applied to EV/Sales Multiple (NTM) (Peer Average), considering the decent guidance.

Considering the recent rally in the stock price and risks associated, we are of the view that it is prudent to book profits at the current levels. Hence, we give a “Sell” rating on the stock at the current price of $21.96 per share, as on 28 July 2022, as on 9.47 am New York Time, USA (GMT-4).

Technical Overview:

Daily Price Chart

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

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

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is July 28, 2022. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.