While shares of Bloom Energy (BE +1.77%) may not power as high as previously thought, Biju Perincheril, an analyst at Susquehana, still thinks there's ample room for the fuel cell specialist's stock to run. Cutting the price target down from $18 on Wednesday, Perincheril now has a $16 price target for Bloom Energy stock.
At the end of Tuesday's trading session, shares of Bloom Energy were priced at $10.80, so Perincheril's $16 price target implies upside of more than 48%.
NYSE: BE
Key Data Points
With this fuel cell stock's financials, it's a matter of time
According to Thefly.com, Perincheril predicated his price target on updated expectations of project timing during the coming quarters. In particular, the analyst noted that Bloom Energy is pursuing opportunities related to data centers, and it's possible that it could recognize these projects in its backlog in the second half of 2024.
Bloom Energy ended 2023 with $12 billion in backlog -- a year-over-year increase of 21%.
Before you plant Bloom stock in your portfolio and expect it to blossom, watch the backlog
Those who are interested in charging their portfolios up with a hydrogen stock are smart to have Bloom Energy on their radars. While it's still not consistently profitable or capable of generating organic cash flow, it's a lot closer than its main competitor, Plug Power.
That being said, it's still important for prospective investors to appreciate the risks associated with an investment in Bloom Energy. While the analyst recognizes upside in excess of 48% for Bloom Energy stock, there's no time frame associated with the price target. Furthermore, those considering buying shares of Bloom Energy should be especially mindful of the company's backlog. Although it ended 2023 with a total backlog 21% higher than that which it had in 2022, the company grew the system portion of the backlog only 6% year-over-year in 2023 compared to year-over-year system growth of 16% at the end of 2022. Should the system contract value in backlog fail to grow, it could portend a longer time to achieve profitability.
