What a time it’s been for Bloom Energy. In the past six months alone, the company’s stock price has increased by a massive 56.3%, reaching $134.48 per share. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Is it too late to buy BE? Find out in our full research report, it’s free.
Why Are We Positive On BE?
Working in stealth mode for eight years, Bloom Energy (NYSE: BE) designs, manufactures, and markets solid oxide fuel cell systems for on-site power generation.
1. Skyrocketing Revenue Shows Strong Momentum
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Bloom Energy’s sales grew at an incredible 20.6% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers.
2. Increasing Free Cash Flow Margin Juices Financials
Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.
As you can see below, Bloom Energy’s margin expanded by 14.2 percentage points over the last five years. Bloom Energy’s free cash flow margin for the trailing 12 months was 2.8%.
3. New Investments Bear Fruit as ROIC Jumps
We like to invest in businesses with high returns, but the trend in a company’s ROIC is what often surprises the market and moves the stock price. Over the last few years, Bloom Energy’s ROIC has increased. This is a good sign, but we recognize its lack of profitable growth during the COVID era was the primary reason for the change.
Final Judgment
These are just a few reasons why we're bullish on Bloom Energy, and after the recent rally, the stock trades at 97.6× forward P/E (or $134.48 per share). Is now the time to initiate a position? See for yourself in our full research report, it’s free.
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