Bloom Energy (BE 9.36%) stock, one of the very first companies to successfully commercialize hydrogen fuel cells for providing off-grid and back-up power, tumbled 3.5% through 9:55 a.m. ET Tuesday -- all but erasing the 7.7% gain it enjoyed on Monday.
Monday's gains, of course, came in response to Bloom's announcement of Q3 earnings -- and a very popular debt offering successfully pushed through on Halloween.
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Bloom Energy Q3 earnings
Bloom reported its Q3 numbers last week, with revenue rising 57% year over year, gross margins popping more than five full percentage points, and both operating profit and operating cash flow turning positive.
Capitalizing on this strong performance, Bloom then announced an "upsized" offering of convertible bonds, raising $2.2 billion in cash with zero percent interest on these bonds through 2030! These bonds can convert into shares of Bloom, but only when the stock hits $194.97 -- implying the investors who bought the bonds think there's a reasonable chance Bloom stock will gain more than 43% from here.
NYSE: BE
Key Data Points
Is Bloom Energy stock a sell?
Today, investors seem to be having second thoughts about that prospect. Granted, there's no new news on Bloom that would make them think that, but consider this.
At $32.2 billion in market cap, Bloom Energy stock currently costs nearly 18 times trailing sales, and a staggering 2,105 times trailing earnings. Meanwhile, analysts polled by S&P Global Market Intelligence think the best the company can achieve over the next five years is growing its earnings about 25% per year.
Folks, that works out to a frankly ridiculous PEG ratio of 84.2 times on Bloom Energy stock. Bloom Energy simply costs too much, and yes, you should sell it.
