Bloom Energy (BE -1.62%), the original hydrogen fuel cell stock, is soaring in mid-morning trading Wednesday after J.P. Morgan upgraded the stock to overweight with a $33 price target.
If J.P.'s right about that price, it means Bloom stock could gain another 18% over the next 12 months -- on top of the 15.5% the stock is already up today through 10:55 a.m. ET.
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What J.P. Morgan likes about Bloom Energy
J.P. cites Congress's decision to maintain 48E tax credits in President Trump's recently signed "One Big Beautiful Bill" (OBBB) as key to its optimism about Bloom stock. The tax credits should add profit margin to Bloom at the same time as they encourage fuel cell system deployments, boosting Bloom's revenue.
According to The Fly, J.P. is expecting these benefits to begin appearing in Bloom's financial results in fiscal (which is also calendar) year 2026. However, the analyst also anticipates that Bloom might begin guiding investors to expect these improved results this year. And that means we might start seeing better guidance as early as July 31, when Bloom is expected to report its Q2 earnings.
Is Bloom Energy stock a buy?
Let's hope the analyst is right about that, because as things stand today, Bloom Energy stock does look a bit pricey. Although the company turned profitable in Q4 last year, generally accepted accounting principles (GAAP) profits are still minimal, and the stock is trading for a P/E ratio well past 1,000.
Bloom did generate positive free cash flow last year, but FCF is still only about $77 million over the last 12 months, giving the stock a price-to-free cash flow ratio of 73 -- quite high even if profits grow at 25% annually, as most analysts predict.
Tax credits or no tax credits, Bloom stock is still too expensive to buy.
