Bloom Energy Price Target Raised Despite Underperform Rating

Bloom Energy's price target has been lifted to $21 by BofA analyst Dimple Gosai, despite a cautious outlook. The analyst notes that the recent earnings report did not provide additional guidance, and the company's achievements only meet existing expectations rather than surpass them. Bloom Energy's revenue has grown 14.6% YoY, but its EPS remains negative. The company's balance sheet reveals strong liquidity, but a significant debt-to-equity ratio and potential financial stress. Insider activity raises concerns with nine insider selling transactions and no buying over the past three months.

Bloom Energy Corporation (BE) has seen its price target lifted to $21 by BofA analyst Dimple Gosai, although the firm maintains an Underperform rating on the shares [1]. Gosai raised the price target from $20, reflecting the analyst's view that the company's recent earnings report did not provide new details to justify a higher valuation. Despite a 14.6% year-over-year (YoY) revenue growth, Bloom Energy's earnings per share (EPS) remained negative, and the company's achievements were seen as meeting rather than exceeding existing expectations.

In the latest earnings call, Bloom Energy reported record revenue of $401 million for the second quarter of 2025, up 19.5% year-over-year [2]. The company also achieved record operating margins and profitability, with the operating margin reaching 7.1% and expectations to approach 8.5% by the end of 2025. These gains were driven by strong demand for clean and reliable power, particularly from data centers and AI applications. Bloom Energy's strategic partnerships with major U.S. utility companies, such as American Electric Power, and its commitment to powering Oracle's AI data centers within 90 days, highlight the growing need for on-site, scalable power solutions in these sectors.

However, the company's balance sheet reveals strong liquidity but also a significant debt-to-equity ratio and potential financial stress. Additionally, insider activity raises concerns, with nine insider selling transactions and no buying over the past three months. This could indicate a lack of confidence among insiders, although it is essential to consider the potential reasons behind these transactions.

Looking ahead, Bloom Energy expects to double its factory capacity from 1 to 2 gigawatts by the end of 2026, reflecting strong pipeline confidence and the expectation of high demand for power capital equipment to support the growth of AI and data center needs [2]. The company also expects its operating margin to continue improving, reaching 8.5% by the end of 2025.

In conclusion, while Bloom Energy's recent financial performance has been strong, the lack of new guidance and the cautious outlook from analysts suggest that the stock may not be undervalued. Investors should carefully consider the company's financial health, debt levels, and insider activity when making investment decisions.

References:
[1] https://www.tipranks.com/news/the-fly/bloom-energy-price-target-raised-to-21-from-20-at-bofa-thefly
[2] https://www.ainvest.com/news/bloom-energy-q2-2025-earnings-call-unpacking-key-contradictions-production-tariffs-capacity-expansion-2508/