Bloom Energy stock target cut to $31 by Piper Sandler

Friday - Piper Sandler has adjusted its price target on Bloom Energy Corp . (NYSE:BE) shares, lowering it to $31 from $33, while maintaining an Overweight rating. The revision follows Bloom Energy’s latest quarterly performance, which included strong product margins and EBITDA surpassing expectations. With a current market capitalization of $5.35 billion and trading at $23.04, InvestingPro analysis suggests the stock is currently overvalued. Despite a flat year-over-year product backlog, the company reported a 30% increase when excluding contributions from SK Ecoplant.

Bloom Energy’s revenue projections for the year are 4% higher than Wall Street estimates, suggesting a solid foundation for growth in 2025. The company also reported improved gross margins, currently at 21.56%, and a robust demand environment. The speed at which projects are reaching completion, referred to as "time-to-power," is accelerating significantly. With a healthy current ratio of 3.36 and revenue growth forecast of 6%, InvestingPro data reveals 12 additional key insights about the company’s financial health and growth prospects. Additionally, Bloom Energy mentioned that existing customers have the option to secure the Investment Tax Credit ( ITC (NSE:ITC)) through 2028 and that the company is in talks with other utilities for agreements similar to the one with American Electric Power (NASDAQ:AEP).

However, the company’s update included some uncertainties, particularly regarding the timing of shipments to AEP and a less favorable operating leverage than expected. Despite these challenges, Piper Sandler’s analyst views the company’s start to 2025 positively and believes Bloom Energy has a strong foundation to build upon due to the current demand environment. For deeper insights into Bloom Energy’s valuation and growth prospects, access the comprehensive Pro Research Report available on InvestingPro. The lowered price target reflects these operational leverage concerns.

In other recent news, Bloom Energy announced its fourth-quarter 2024 earnings, significantly surpassing market expectations. The company reported an earnings per share (EPS) of $0.43, well above the forecasted $0.29, with revenue reaching $572.4 million, exceeding the anticipated $507.36 million. This strong financial performance was part of a record annual revenue of $1.47 billion for 2024, marking a 10.5% increase from the previous year. Additionally, Bloom Energy provided optimistic guidance for 2025, projecting revenue between $1.65 billion and $1.85 billion. The company expects a non-GAAP gross margin of approximately 29% and a non-GAAP operating income of around $150 million. In terms of analyst activity, Bloom Energy has not been recently upgraded or downgraded by major firms. The company also highlighted its strategic focus on innovation and cost reduction, which contributed to its success amid growing demand for energy solutions. Bloom Energy’s CEO, KR Sridhar, emphasized the company’s readiness to meet increasing demand driven by AI and electrification trends.

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