What happened
Shares of fuel cell technologist Bloom Energy (BE -1.93%) were in retreat along with the market overall today. The stock was down 4.5% as of 12:30 p.m. ET, compared to a 1.5% drop for the S&P 500 and a 2.6% fall for the Nasdaq Composite.
Image source: Getty Images.
So what
The specific catalyst for the sell-off came from social media company Snap (SNAP -2.72%), which said last night it would grow less than its previous forecast for year-over-year revenue expansion of 20% to 25%.
A company that makes money primarily off of ads has little to do with Bloom Energy and its fuel cells that help solve energy needs for industrial properties (everything from data centers to hospitals to grocery stores). However, investors were spooked by the macroeconomic and geopolitical headwinds cited by Snap, and fears were kindled that a wider slowdown is in store for the economy at large.
Now what
Bloom Energy, for its part, is coming off of a record year of system placements as organizations look for efficient energy solutions (including hydrogen and converting waste to energy). For full year 2022, the company is anticipating revenue of $1.1 billion to $1.15 billion, up about 13% from last year. It's also investing in new manufacturing capacity to meet rising demand for its energy fuel cell systems.
However, bear in mind Bloom operates in the red (although it expects to turn a profit on an adjusted basis this year). Companies that don't turn a profit yet are currently out of favor in the present market dynamic that is grappling with higher interest rates. If Bloom can execute on its expansion plans and begins to reach a more profitable scale, this stock could be a great long-term value (it currently trades for 2.7 times trailing-12-month sales). In the meantime, though, expect heightened volatility from this energy stock.
