Wall Street says Bloom Energy stock is worth only $14. So why are investors paying $17 for Bloom?
Bloom Energy (BE 12.36%) stock is on a roll. For four days in a row, shares of the fuel cell renewable energy pioneer have risen, including a monster 17% surge in value on Tuesday and a further 11.7% spike through 10:15 a.m. ET this morning.
You can thank Wall Street for keeping the good times rolling. On Monday, Wells Fargo raised its price target on Bloom stock to $14 a share. On Tuesday, RBC Capital reiterated its own buy rating — also with a $14 price target.
What Wall Street says about Bloom Energy stock
Wells Fargo started the rally with its Monday note touting rising demand for Bloom Energy’s fuel-cell-powered electricity generators to power cloud data centers. The “timing of larger deals is uncertain,” cautions the analyst. Still, Wells sees sales growing in 2025 and wants to get ahead of the curve.
Referring to meetings the bank has held with Bloom’s CFO, RBC said Bloom is working to better explain to investors how to “evaluate progress on execution.”
Is Bloom stock a buy?
And to be blunt, Bloom has got some ‘splainin to do.
The company’s earnings report two weeks ago featured misses on both top and bottom lines, with sales falling 14.5% and Bloom reporting a $0.25-per-share loss according to generally accepted accounting principles (GAAP). This was a big disappointment, coming just one quarter after Bloom reported a Q4 2023 profit — its first quarterly profit ever in a nearly 10-year history of reporting as a public company.
That miss threw into question analyst hopes that Bloom might turn profitable on at least an adjusted basis this year and report an honest-to-goodness full-year GAAP profit next year. Don’t get me wrong. 2025 still could be the year Bloom finally earns a profit and makes up for a decade of disappointing its shareholders.
But with Bloom stock trading north of $17 today and even its fans on Wall Street saying the stock is worth only $14, investors should probably be cautious about buying in.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.