Bloom Energy Earnings: On Track to Achieve 2023 Guidance Ahead of Analyst Day

We maintain our $21 per share fair value estimate for no-moat Bloom Energy BE following the company’s first-quarter results. We view shares as slightly undervalued.

Bloom reiterated its 2023 guidance, and we leave our estimates unchanged ahead of the company’s analyst day in two weeks. We view its 2023 revenue guidance as largely spoken for between its SK ecoplant take-or-pay volumes, an asset repowering, and three Amazon data centers. With regards to margins, the company reported solid year-on-year improvement in product gross margins—increasing to 34% from 22.5% in the prior-year quarter. For the full-year 2023, Bloom expects relatively stable average selling prices, while product costs are expected to decline 12%, supporting gross margin expansion.

Over the medium term, we remain generally below Bloom’s multiyear revenue and margin guidance. Our questions relate to Bloom’s ability to drive sales growth at its historical 25%-30% rate as sales contribution from the United States and South Korea are likely to decline in coming years. In addition, we await further details on the company’s transition from natural-gas-powered fuel cells in the near term to carbon capture and hydrogen for the longer term. In addition, Bloom’s electrolyzer offering is just reaching commercial maturity, with first orders expected in 2023. We look for more comments on each of these at the forthcoming analyst day.