The Bloom Energy stock [BE] has had an electrifying 41% gain over the past month (through 23 November). Lighting up the clean energy provider’s stock has been the US House of Representatives finally passing its $1trn infrastructure bill after weeks of wrangling. As a specialist in building sustainable energy solutions, Bloom Energy stands to gain from money earmarked in the bill to accelerate the transition to clean energy.
Yet despite the package getting through the house, insiders at the company have actually been selling shares in the company causing the stock to dip since the middle of November.
Is this opportunistic selling something to worry investors or will the infrastructure bill deliver more wattage to the longer term outlook for Bloom Energy’s stock?
What’s happening with Bloom Energy’s stock
Staff selling shares is always going to be a concern for investors. The Motley Fool’s Neha Chamaria reports that insiders sold chunks of Bloom Energy’s stock between 9 November and 11 November at between $33.16 and $35.48. That was felt on Bloom Energy’s stock price, which dropped over 6% between 8 November and 19 November. Chamaria also chalks up the dip to lower oil prices making the clean energy market appear less competitive.
Still, Bloom Energy’s stock is up over 30% over 6 months and the impact of the infrastructure bill shouldn’t be discounted. At $73bn the money in the bill for clean energy is a substantial chunk of change, even if it is a little short of the $100bn President Biden had hoped for. This will be spent on rebuilding America’s electric grid and accelerating the shift to clean energy - something that should benefit Bloom Energy’s stock.
Total of Biden's infrastructure bill reserved for clean energy
Another tailwind is a mega-bucks deal in South Korea. Bloom Energy has secured a four-year contract from South Korea Group SK Group worth a whopping $4.5bn. The company will supply 500 megawatts of power as part of the deal. Aside from the revenue haul, SK Group will make an equity investment of $500m and add a member to Bloom Energy’s board. After the deal was announced in October, Bloom Energy’s stock jumped 37%.
What the analysts are saying about Bloom Energy
Off the back of the South Korea deal, Morgan Stanley upped its price target on Bloom Energy from $25 to $32 - a near 13% upside on Tuesday’s $28.47 close. Analyst Stephen Byrd also raised his revenue estimate for the company by $300m between 2022 and 2024.
On 5 November, Raymond James’s Paval Molchanov maintained his Strong Buy rating on Bloom Energy, moving its price target to $34. The previous month Molchanov had described Bloom as a ‘high-beta, aggressive growth idea’ suggesting that ‘in the context of climate adaptation’ and ‘grid outages’ the business was not fully appreciated. Truist Securities also upped its price target in November from $25 to $33 while maintaining its Hold rating.
Revenue forecast for 2022
Wall Street is predicting plenty of growth in sales for Bloom Energy. For the full year, revenue is pegged at $936.7m, up 19.2% from the $794.25m the previous year, according to data from Yahoo Finance. For 2022, revenue is forecast at $1.2bn, up 26.9% from 2021.
Among the analysts, Bloom Energy’s stock has a $34.14 price target from analysts tracking it on Yahoo Finance, suggesting a near 20% upside on Tuesday’s close.
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