Bloom Energy – Very satisfying investor day

250-kW station at American broadcast company NBC, © Bloom
250-kW station at American broadcast company NBC, © Bloom

The future prospects of Bloom are fully intact and unchanged (over 30% growth p. a.) and allow for a very positive outlook: for 2022, over 1.1 billion USD turnover, cash flow positive, gross profit margin of 24% and on the way to the profit zone with strongly increasing backlog of orders and new complementary fields of activity (e.g. electrolysis). The first quarter, with a turnover of 201 million USD and a stated loss of 78.4 million USD (contains 26.3 million USD stock-based compensation), or minus 0.44 USD per share (GAAP), was disappointing at first glance. Large material deliveries to key customer SK ecoplant in South Korea was one reason for it.
The company itself has said time and again that the real growth will only come in the second half of the year, but now at the percentage of 30 to 70 instead of the 40 to 60. This means that 30 percent of sales are likely to be generated in the first half of the year and 70 percent in the second. Remember 2021, when the very high growth in the fourth quarter resulted in a good year overall? This is because Bloom must first go through the approval procedures for the many FC projects and get those “acceptances” before the actual implementation and accounting can take place. A lot of things may be shifted from one quarter to the next, but the amount of acceptances itself already provides a certainty of implementation. Here, Bloom is on the right track and is also following it as predicted.

Added to this is the massive expansion of capacity, which can be expressed in the annual energy amount that is newly installed. Step by step, this will exceed one gigawatt per year by 2023, and will increase in 2022, through a 150 million USD investment, from 280 to 580 MW. The payback period for the investment is expected to be less than a year. The profit margin could increase as the energy volume increases over the course of the year.

HOW

Influences on the share price
The finance minister of India recently made a visit to Bloom headquarters. CEO K. R. Sridhar stressed that Bloom sources many vendor parts from India and is active there with projects. I could very well imagine that an Indian conglomerate like Adani or Reliance, both of which want to invest massively in the area of hydrogen (over 70 billion USD each), might embark on a project with Bloom and/or contract Bloom for FC power stations. A speculation of mine, but thoroughly realistic. What’s more is that Bloom, with its shareholders, is not only building up its major client base, but also gaining more security from being taken over and perfectly expanding the geographic mixing of its activities (globalization).[…]

… Read this article to the end in the latest H2-International

Warning
Each investor must always be aware of their own risk when investing in shares and should consider a sensible risk diversification. The FC companies and shares mentioned here are small and mid cap, i.e. they are not standard stocks and their volatility is also much higher. This report is not meant to be viewed as purchase recommendations, and the author holds no liability for your actions. All information is based on publicly available sources and, as far as assessment is concerned, represents exclusively the personal opinion of the author, who focuses on medium- and long-term valuation and not on short-term profit. The author may be in possession of the shares presented here.

Author: Sven Jösting, written June 11th, 2022

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