Image: Shutterstock
Key Takeaways
Bloom Energy's shares jumped 595.9% in a year, beating the industry, sector, and S&P 500.
The stock benefits from AI data centers, crypto mining, and reshoring, driving clean power demand.
Bloom Energy's EPS estimates climbed and its ROIC beat the industry, though shares have been trading at a premium.
Shares of Bloom Energy Corporation (Free Report) have skyrocketed 595.9% in the past year compared with the Zacks Alternative Energy - Other industry’s rally of 57.6%. The company has also outperformed the Zacks Oil & Energy sector’s return of 35.1% and the S&P 500’s rally of 19.8% in the same time frame.
Bloom Energy is benefiting from the rising demand for clean power from artificial intelligence-based data centers and customers turning to distributed energy solutions to avoid transmission and distribution bottlenecks.
Price Performance (One Year)
Image Source: Zacks Investment Research
Another industry player, Talen Energy Corporation (Free Report), operates a fleet of power generation assets that deliver reliable, dispatchable electricity to meet the around-the-clock needs of commercial, industrial, and residential customers. Talen Energy has gained a whopping 160.5% in the past year, outperforming its industry, the sector, and the S&P 500.
Bloom Energy has recently been trading above its 50- and 200-day simple moving averages (SMAs), indicating a bullish trend. These moving averages are widely used by traders and analysts to identify potential support and resistance levels. The 50- and 200-day SMAs are particularly significant as they often serve as early indicators of a stock’s emerging uptrend or downtrend.
Bloom Energy 50- & 200-Day SMAs
Image Source: Zacks Investment Research
So, should you add Bloom Energy to your portfolio solely based on its recent positive price movement? Let’s take a closer look at the underlying factors that can help investors determine whether this is the right time to include the stock in their portfolio.
Factors Acting in Favor of Bloom Energy
Demand for clean and reliable power is surging, driven by artificial intelligence-based data centers, crypto-mining operations, and the reshoring of certain manufacturing activities in the United States.
Bloom Energy addresses this demand through its Energy Server platform, which provides dependable, clean, and cost-effective power solutions for businesses and utilities. Using proprietary solid oxide technology, the system generates electricity through the electrochemical conversion of fuels rather than combustion.
Moreover, geopolitical tensions in the Middle East disrupt energy supplies, driving up natural gas and electricity prices. This enhances the value of distributed, on-site power solutions. Bloom Energy's modular design allows multiple systems to be combined in various configurations, enabling scalable power generation from a few hundred kilowatts to several hundred megawatts.
Bloom Energy is steadily investing in research and development to enhance the efficiency of its modules, lower production costs, and improve profit margins. The company stands to gain from government incentives supporting clean energy. Bloom Energy also plans to launch a new manufacturing facility in California to meet growing demand for its products.
Bloom Energy’s Earnings Estimates Moving North
The Zacks Consensus Estimate for Bloom Energy’s earnings per share for 2026 and 2027 increased 48.39% and 13.39%, respectively, in the past 60 days.
Image Source: Zacks Investment Research
In comparison, the Zacks Consensus Estimate for Talen Energy’s earnings per share for 2026 and 2027 increased 9.57% and 10.29%, respectively, in the past 60 days.
Bloom Energy Stock Returns Better Than Its Industry
The return on invested capital (“ROIC”) measures how well a company generates returns on the money it invests. ROIC is a key indicator of a company's profitability and operational efficiency. The ROIC of the company indicates that it is investing money more efficiently than peers in the industry.
Bloom Energy’s ROIC has outperformed the industry average in the trailing 12 months. The ROIC of Bloom Energy was 4.12% compared with the industry average of 1.64%.
Image Source: Zacks Investment Research
Another company operating in the same industry, Ormat Technologies (Free Report), has an ROIC of 4.31%. That figure is also better than that of the industry.
Bloom Energy Trading at a Premium Valuation
Bloom Energy has recently been trading at a premium valuation compared with its industry, with the forward 12-month price-to-sales (P/S) ratio at 12.61X. The industry has been trading at 5.5X.
Image Source: Zacks Investment Research
Additionally, Ormat Technologies has been trading at 5.87X, a premium valuation compared with its industry.
Rounding Up
Bloom Energy continues to demonstrate solid performance, driven by growing demand for clean energy and its capability to deliver rapid, on-site power solutions. Its systems can supply tailored energy directly to customers, bypassing the limitations of traditional transmission and distribution networks.
With rising earnings estimates, robust stock performance, and a return on equity exceeding the industry average, Bloom Energy presents an appealing opportunity for investors.
However, considering the premium valuation, we suggest investors maintain their position in this Zacks Rank #3 (Hold) rated stock.
Comments
Log in or sign up to join the conversation.