By now you've probably heard the bad news about Bloom Energy (BE 10.16%). On Thursday, the hydrogen fuel cell pioneer announced a big revenue miss and a 23% decline in revenue year over year for its fiscal fourth quarter of 2023. The CFO announced he's leaving the company, and investors seemed inclined to do likewise, selling off Bloom stock by 17.5%.
On Tuesday, the selling continued, with Bloom stock losing a further 9.1% through 3:05 p.m. ET -- and Bank of America may be the reason.
NYSE: BE
Key Data Points
A late downgrade from BofA
Friday, as you can imagine, wasn't a lot of fun for Bloom Energy investors, as their stock sold off after earnings. Earnings came out Thursday evening, and Friday morning was mostly dominated by news of various analysts cutting price targets and downgrading the stock -- hence the falling stock price.
What you may not know is that at the very end of Friday -- after trading was done for the day and at the start of a three-day weekend in which no new trading could begin -- Bank of America also decided to downgrade Bloom Energy. Analyst Julien Dumoulin-Smith lowered BofA's price target on Bloom stock to $9 a share -- the lowest price target of any analyst commenting on Bloom on Friday.
Not only upset by the miss on sales, Dumoulin-Smith pointed out that new order activity was weak in December, leading to weak guidance for this coming year. Accordingly, the analyst is continuing to recommend that investors sell Bloom stock.
Is Bloom Energy stock a sell?
Is that really fair, though? Because as it turns out, Bloom's guidance wasn't exactly horrible. Bloom says 2024 sales will range from $1.4 billion to $1.6 billion, up 12.5% from 2023. Furthermore, non-GAAP operating profit is estimated to be anywhere from $75 million to $100 million -- up several times from the $19 million in non-GAAP operating profit reported in 2023.
True, management didn't promise any GAAP profit in 2024. And 12.5% probably isn't as great as what growth investors are looking for. But it's at least better than Bloom promising another revenue decline.
Last week, Bloom basically confirmed analyst predictions that it's going to turn non-GAAP profitable this year, which implies that analysts might be right about the company finally turning GAAP profitable in 2025 as well. Investors who are selling Bloom stock today could be selling just before the news about it starts to improve.
