Bloom Energy stock rating reiterated at Buy by UBS on growth outlook

UBS reaffirmed its Buy rating on Bloom Energy (BE) with a $29 price target, citing the company's advantageous market position and time-to-power advantage. The firm expects improved profitability, projecting Q2 2025 sales of $365 million and EBITDA of $35 million, up from $326 million and $25 million respectively in Q1 2025; full year 2025 sales are estimated at $1.777 billion versus $1.474 billion in 2024. Recent regulatory approval for Bloom Energy's fuel generators at Amazon Web Services and Cologix data centers, along with Q1 2025 revenues exceeding estimates, also support the positive outlook.

Analysis

UBS reaffirmed its Buy rating on Bloom Energy Corp. (BE) with a $29.00 price target, following a significant 10.17% stock price increase in the past week, even as InvestingPro data indicates the stock trades at notably high valuation multiples. The firm anticipates sequential and year-over-year growth, forecasting Bloom Energy's Q2 2025 sales at $365 million, up from $326 million in Q1 2025, and Q2 2025 EBITDA at $35 million, an increase from $25 million in the prior quarter. For the full fiscal year 2025, UBS projects total sales of $1,777 million, a substantial increase from $1,474 million reported in 2024. This optimism is underpinned by Bloom Energy's recent performance, including Q1 2025 revenues of approximately $326 million which exceeded consensus estimates of $293 million by around 11%, and non-GAAP gross margins of roughly 29%, surpassing Wall Street's 22% expectation, driven by a repowering contract and strong product revenues. The company's financial health is further supported by a strong current ratio of 3.44, indicating healthy liquidity. Recent strategic wins, such as regulatory approval for AEP Ohio to deploy Bloom Energy’s solid oxide fuel generators at Amazon Web Services and Cologix data centers under six and fifteen-year contracts respectively, reinforce the positive outlook. Other analysts also reflect this sentiment, with RBC Capital reiterating an Outperform rating and BMO Capital Markets maintaining a Market Perform, citing factors like Bloom's market position, time-to-power advantage, and legislative benefits. The overall sentiment surrounding the company is strongly positive, aligning with its expansion in the alternative energy sector via its solid oxide fuel cell technology.

Key Decisions for Investors

• Investors should consider the positive catalysts including strong Q1 2025 earnings, upwardly revised analyst forecasts, and significant new contracts with entities like Amazon Web Services via AEP Ohio, while carefully weighing the stock's recent appreciation and high valuation multiples.
• It is prudent to closely monitor Bloom Energy's execution on its projected Q2 and full-year 2025 sales and EBITDA targets, as achieving these will be critical for sustaining investor confidence and justifying the current market valuation.
• Investors should track ongoing developments in regulatory approvals and the securing of further large-scale deployment contracts, particularly within the data center and industrial sectors, as these are key indicators of sustained growth momentum and market penetration for Bloom's fuel cell technology.