Uneven Profit Takes Away From Bloom Energy’s Bullish Headlines

April 12, 2025 at 07:30 AM EDT

Bloom Energy unit Source: Bloom Energy press kit

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Bloom Energy Corporation (NYSE: BE) took investors on quite the ride in the week ending April 4, 2025. The stock closed down over 21% as investors fled to cash or the relative safety of utilities stocks or consumer staples stocks.

But before BE stock tumbled, it was up 8% after announcing a partnership with Conagra Brands Inc. (NYSE: CAG). The packaged goods food company will use Bloom Energy’s fuel cell technology at two of its Ohio plants. Under the terms of the agreement, Bloom will deploy 6 MW, which will supply 70% to 75% of the electricity needs at the facilities. The agreement aligns with Conagra’s 2030 greenhouse gas reduction target by cutting down greenhouse gas emissions by 19%.

In almost any other week, a deal of that size would be enough to bring in the buyers, but last week wasn’t an ordinary week. Bloom Energy continues to look like one of the better buys among energy stocks. However, the macroeconomic picture may make it a difficult buy at the moment.

Bloom Energy Benefits From Long-Term Deals

Bloom Energy manufactures and markets solid oxide fuel cells, electrolyzers, and hydrogen fuel cells. The company’s products generate clean on-site electricity for various customers. In 2025, that means paying attention to the data center market.

Even if future data center demand slows down, the existing demand for data centers highlights a key point about artificial intelligence: It requires an extraordinary amount of electricity. But new power generation can take years.

That's why companies like Conagra look to Bloom Energy. The company’s fuel cells are portable, so the company can deliver solutions that can be deployed quickly. And that type of speed is exactly what many AI companies are looking for today.

In the company’s fourth quarter 2024 earnings report in February, KR Sridhar, the company’s founder, chairman, and chief executive officer (CEO) told investors, “We are the solution of choice for powering AI, whether that’s large data centers that need reliable power now, or businesses that are going to use AI for productivity gains...”

That demand is one reason utility companies may be lining up for deals. For example, in late 2024, the company signed a deal for 1 gigawatt of capacity with American Electric Power Inc. (NYSE: AEP).

Once Bloom Energy gets a customer, it tends to be sticky. The company has long-term contracts spanning 10 to 20 years for every fuel cell it has sold. By the end of 2024, that resulted in a service backlog of $9 billion.

Why Now May Not Be the Time for BE Stock

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With a manufacturing base in the United States, Bloom Energy should be a net winner from tariffs. That didn’t prevent the stock from selling off shortly after the Trump administration's announcement. This was most likely due to the company’s lack of consistent profitability.

In its fourth-quarter earnings report, delivered in February, the company reported record revenue of $572.40 million and an operating margin of 18.3%, which helped boost its earnings per share (EPS) to 43 cents.

That’s nice, but investors have to wonder if it’s sustainable. A defining feature of Bloom Energy compared to its competitors in the hydrogen sector is that while it does generate consistent revenue, it also generates fewer earnings. In the coming quarter, analysts are projecting negative four cents per share earnings.

The Bloom Energy analyst forecasts on MarketBeat give BE stock a consensus Hold rating even though it has a price target of $25.06, a 50% increase from the closing price on April 4, 2025. However, at a time when investors are going to be for companies that are going to post growing earnings, Bloom Energy will need to show a path to sustained profits to earn investor dollars.

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Uneven Profit Takes Away From Bloom Energy’s Bullish Headlines

Bloom Energy Benefits From Long-Term Deals

Why Now May Not Be the Time for BE Stock

Where Should You Invest $1,000 Right Now?

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