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 million in Q1FY22, compared to revenues of $194.0 million 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 million, owing to higher operating expenses.
• It ended the period with a cash position of $286.0 million as of 31 March 2022.

Source: Company Reports, Analysis by Kalkine Group

Recent Updates

• On 06 June 2022, Westinghouse Electric Company and Bloom Energy Corporation has announced that they have entered into a Letter of Intent to pursue clean hydrogen production in the commercial nuclear power market.
• On 25 May 2022, BE and LSB Industries, Inc. have announced plans to install a 10 megawatt (MW) solid oxide electrolyzer at LSB’s Pryor, Oklahoma facility. The facility is anticipated to produce green hydrogen that will aid to the synthesis of approximately 13,000 metric tons of zero-carbon ammonia per year.

Outlook

The company has reaffirmed its full-year 2022 outlook and expects the revenue to be in the range of $1.1 - $1.15 billion. 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 million 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)

Technical Overview:

Daily Price Chart

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

Stock Recommendation

Over the last one month, the stock has given a return of ~11.10%. The stock is trading lower than the average price of 52-week low-high range for the stock at $11.47-$37.01, respectively.

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 record revenues, optimistic guidance and decent pipeline.

Considering the aforementioned factors along with growth in top-line, a “Speculative Buy” recommendation has been assigned on the stock at the closing market price of $15.61 per share, as of 13 June 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.