Why Bloom Energy Stock Is Down 12% Today

Easy come easy go. a month ago Blooming energy (BE -11.33%) The stock is up 11% in a day after reporting strong sales (but a big GAAP loss) in its Q2 2024 earnings report. Today, the fuel cell stock is moving in the opposite direction, down 11.7 % by 10:05 a.m. ET.

You can blame the investment bank Jefferies for this.

Bloom Energy stock degradation

In a note published on StreetInsider.com, Jefferies analyst Lloyd Byrne today took Bloom Energy management to task for providing investors with “minimal transparency” regarding its 2023 announcement of a deal to sell cans with 500 megawatts of Bloom fuel cells to Korea’s SK Group – – and generate $4.5 billion in revenue for Bloom over the next 20 years.

The deal is worth about three times Bloom’s 2023 earnings, according to data from S&P Global Market Intelligence. However, nine months after the announcement, Jefferies worries that it is still unclear how the business is progressing. In addition, Byrne cited concerns about the size of Bloom’s backlog and (although this factor is not within Bloom’s control) the risk that federal fuel cell tax credits will expire after this year.

Jefferies downgraded Bloom to hold today and is reducing optimism on Bloom, lowering its 2025 and 2026 sales forecasts by 15% and 25%, respectively.

Is Bloom Energy stock a buy?

And yet, this is just one analyst’s opinion. Bloom itself does not form nothing down.

Conversely, in its August report, management forecast annual sales of between $1.4 billion and $1.6 billion in 2024, which is actually above analysts’ estimates. Management further estimated a roughly 6 percentage point increase in gross profit margins and predicted that non-GAAP (adjusted) operating profits would turn positive this year, between $75 million and $100 million.

If Bloom is right about this — and Byrne is wrong — then Bloom could be on track to report an honest GAAP profit in 2025. Maybe not enough profit to technically justify the stock’s market cap of $2.5 billion — but perhaps enough to rekindle enthusiasm for the stock.