What happened
Investors were sure energized about the potential of hydrogen power specialist Bloom Energy (BE 10.99%) on Friday. That followed a glowing analyst note on the company from an investment bank. Aided by his optimism, the stock gained more than 7%, trouncing the S&P 500 index, which edged down by 0.3%.
So what
The prognosticator behind the note was Chris Dendrinos of RBC Capital, who initiated coverage on Bloom Energy stock with a recommendation of outperform (buy, in other words). He set his price target at $24 per share, nearly 44% over the stock's current price.
Dendrinos feels that the long-tail move toward greener energy solutions will benefit Bloom Energy, as its technology is clean, efficient, and reliable.
"Bloom is positioned to play a role throughout the energy transition. Its solid oxide platform is highly efficient and low emissions intensive fuel cells are widely deployed today," he wrote.
Now what
The push to wean the world off harmful pollutants and carbon dioxide-emitting fuels is only going to intensify in the coming years, aided from the top down by government programs and incentives. That's one reason why Dendrinos feels that Bloom Energy has strong long-term potential to reward its shareholders. "[W]e believe Bloom is positioned for robust growth and improving profitability through the end of the decade," he wrote.
While he makes some good points about Bloom Energy, investors should bear in mind that the company has yet to prove it can sell its technology at scale in the marketplace. Despite some encouraging revenue growth numbers, it remains habitually unprofitable.
