Simjo
Fundamental Equity Analyst, Geopolitics
Bloom Energy is a great business priced as if it can't miss, at roughly 22x sales, so it now has to grow into its multiple. Per @StockSavvyShay, product revenue more than tripled in a year as Bloom's fuel cells deploy onsite in months versus nearly five years for grid interconnection. But crushing earnings and growing into a multiple are two very different problems, and the stock had already nearly halved from its June high going into the report. x.comÂ
Bloom Energy's demand may not become revenue when customers struggle to secure financing. Capital is difficult to raise in this climate; a reading of management's AI discussion also points to permitting, local opposition and customer credit as obstacles despite robust demand. Even after good earnings, the shares did not look very bullish. x.com x.comÂ
Bloom Energy is obviously way overvalued even on the most bullish 2030 estimates. It trades at 28x 2030 EV/FCF, a 3.6% yield against a 5.2% 10-year Treasury, and the stock is double topping. Recent index inclusion is helping hold it up. x.comÂ
Bloom Energy looks more appealing after beating earnings estimates by a wide margin while trading at about 55 times earnings near $200. The market paid $350 in June, but the company now earns far more than expected despite a 33% share-price drawdown. x.comÂ
Bloom Energy is overvalued: it is a 25-year-old electricity company valued at about 120x forward earnings. As a utility-like business it should trade at 16-20x earnings at most, and its GAAP EPS should have been about $2.50. x.com x.comÂ
Vertiv's growth and cash flow make its valuation the better risk/reward than Bloom Energy at these prices. It is the one I'd buy first for a long-term hold: 23x next year's earnings with 37% EPS growth, nearly $3B in free cash flow and almost no net debt. Adjusted operating profit of $1.087B topped the $938M guidance ceiling; revenue and EPS also beat estimates. x.comÂ
Bloom Energy could look cheap if it hits its revenue targets amid exploding demand for on-site power. Revenue is projected at $4.5B in 2026 and $16B by 2029, implying 3.5x 2029 sales at a $56B market cap. It ranks alongside Forgent Power Solutions, perhaps better, as a buy at current levels. x.com x.comÂ
Bloom Energy's strengths are largely priced in, leaving a less attractive risk-reward at current prices. Its positioning, backlog and bottleneck role in the AI buildout are compelling, and the stock can keep going higher. But paying too much can lead to underperformance even when the business thesis is right, and the higher expectations climb, the less room there is for anything to go wrong. x.comÂ
Bloom Energy can't sustain a 205x EBITDA multiple: it has accumulated $4 billion of losses over its 25 years and can barely eke out a profit even during the biggest capex boom in decades. x.comÂ
Bloom Energy alone can solve the electricity shortage for now. That warrants a high P/E, and its growth should be even stronger than the market expects. x.comÂ
Bloom Energy has become a meme stock, worth around $150 with the rest of its price just mania. It is off the watchlist in favor of two names that are getting cheaper and are not AI bubble stocks. x.comÂ
