Bloom Energy Stock Up 150% Since Biden Win; More to Come?

Bloom Energy stockBE Stock May Be the Perfect Biden Green Stock

President Joe Biden has barely moved into the White House, but his decisions so far point to an aggressive green energy push.

For one, the U.S. will be rejoining the Paris Agreement on climate. Biden also axed the Keystone XL pipeline and halted oil and gas exploration and drilling on federal lands. He also wants to replace the federal government’s vehicles with electric ones.

The green energy focus is clearly a major policy shift. We’ve seen massive run-ups by solar stocks and other alternative energy stocks. One of the green energy plays popping higher is Bloom Energy Corporation (NYSE:BE).

The company’s “Bloom Energy Server” is a stationary power generation platform that converts standard low-pressure natural gas or biogas into electricity. Bloom Energy Corporation says the process is more efficient—and has a lower carbon footprint—than solar energy. Its sales are global, including the major green energy market in India.

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Bloom Energy stock was languishing at $14.52 on the day of the U.S. election, but since November 3, it has surged 150%. Consider that the stock was trading at a lowly $3.00 back in March 2020.

BE stock is already up 338% over the past year—and up 144% over the past three months to January 28—so the easy money may have been made, but there’s still plenty of upside left.

Chart courtesy of StockCharts.com

Bloom Energy Moves Toward $1 Billion in Revenues

Bloom Energy Corporation’s five-year revenue picture is impressive, highlighted by four consecutive years of double-digit growth to a record $785.2 million in 2019. The compound annual growth rate (CAGR) during this time frame was a stellar 46%.

Fiscal Year Revenues (Millions) Growth
2015 $172.9 N/A
2016 $208.5 20.6%
2017 $376.0 80.3%
2018 $632.7 68.3%
2019 $785.2 24.1%

(Source: “Bloom Energy Corp.” MarketWatch, last accessed January 28, 2021.)

The company’s revenues for full-year 2020 are expected to see a pause due to the COVID-19 pandemic. Analysts estimate that Bloom Energy will report flat revenue of $795.5 million for 2020. The revenue growth is expected to pick up to 23.1%, to $978.9 million, in 2021. (Source: “Bloom Energy Corporation (BE),” Yahoo! Finance, last accessed January 28, 2021.)

Bloom Energy has been reporting negative earnings before interest, taxes, depreciation, and amortization (EBITDA), as the following table shows.

Fiscal Year EBITDA (Millions) Growth
2015 -$264.9 N/A
2016 -$201.0 24.1%
2017 -$114.5 43.1%
2018 -$116.8 -2.1%
2019 -$157.0 -34.5%

(Source: MarketWatch, op. cit.)

The company has also continued to lose money on both a generally accepted accounting principles (GAAP) and adjusted earnings-per-share (EPS) basis.

Fiscal Year GAAP Diluted EPS Growth
2015 -$3.14 N/A
2016 -$2.57 18.0%
2017 -$2.41 6.1%
2018 -$5.14 -112.7%
2019 -$2.67 48.1%

(Source: MarketWatch, op. cit.)

An encouraging sign for Bloom Energy Corporation is that its adjusted losses are expected to narrow to $0.57 per diluted share in 2020 and $0.07 per diluted share in 2021. The company, however, has a high estimate calling for profits of $0.17 per diluted share in 2021. (Source: Yahoo! Finance, op. cit.)

Bloom Energy’s free cash flow was negative from 2015 to 2018, prior to making a strong move to positivity in 2019. The cash flow could be used for capital spending or debt reduction.

Fiscal Year Free Cash Flow (Millions) Growth
2015 -$315.9 N/A
2016 -$291.8 7.6%
2017 -$72.3 25.2%
2018 -$137.2 -89.7%
2019 $112.7 182.2%

(Source: MarketWatch, op. cit.)

Analyst Take

Bloom Energy stock has been seeing love from institutions and insiders. About 288 institutions hold BE stock, and insiders added a net 17 million shares over the last six months. (Source: Yahoo! Finance, op. cit.)

My bullish sentiment for Bloom Energy Corporation is high, given the Biden administration’s obvious focus on green energy.