Cautious Outlook on Bloom Energy: Sell Rating Due to Limited Pipeline Visibility and Valuation Pressure

Bank of America Securities analyst Dimple Gosai reiterated a Sell rating on Bloom Energy today and set a price target of $21.00.

Dimple Gosai has given his Sell rating due to a combination of factors impacting Bloom Energy’s outlook. Despite Bloom Energy’s strong second-quarter performance, the reaffirmed guidance and lack of new details suggest that high-profile deals, such as with Oracle, are already factored into the current stock price. This implies that these deals are necessary just to meet existing targets rather than exceed them. Additionally, there is limited visibility into Bloom’s project pipeline, which presents downside risks for the company beyond 2026.
Moreover, while management expressed optimism about demand, there was insufficient information regarding the timing and monetization of the Oracle deal. The anticipated capacity expansion seems premature given the current forecasts, and there are concerns about rising accounts receivable and potential cash burn. These issues, combined with the possibility of a capital raise if orders do not materialize, contribute to the cautious outlook. Consequently, the valuation remains under pressure, with a price objective of $21, reflecting limited pipeline visibility and the need for further catalysts to justify stock price growth.