As a company in the hydrogen energy domain, Bloom Energy (NYSE:BE) stands apart from the rest. Many traders recognize hydrogen as a buzz-worthy investment, but prospective investors should understand that there’s more to owning Bloom stock than just jumping on a red-hot trend.
As I explained in my list of six hydrogen stocks to buy for the next generation of travel, Bloom Energy’s “unique selling point is a fuel cell that allows its industrial-sized generators to run on natural gas, biogas or hydrogen without combustion.”
With Bloom Energy’s flagship product, the Bloom Energy Server, the company seeks to transform the hydrogen economy as we know it. It’s an ambitious mission as Bloom Energy strives to deliver a distributed power generation system that’s not only clean but cost-effective as well.
It might be hard to imagine an “always-on” power generation system that fits this description. Yet, Bloom Energy dares to be innovative and disruptive.
Let’s take a look at Bloom stock and determine how it can fit into your hydrogen-niche portfolio.
Bloom Stock at a Glance
From a technical standpoint, Bloom stock is the type of asset that makes sizable moves in both directions. Daily price moves of 5% or more are not uncommon for this stock.
The onset of the novel coronavirus was particularly challenging for Bloom stock holders. After topping out at $14 in February, the share price quickly plunged to a 52-week low of $3 in March.
However, strong-stomached investors were soon rewarded as a spectacular comeback ensued. October was a particularly encouraging month as Bloom stock touched a 52-week high of $23.38.
A sharp pullback then followed, bringing the share price down to $14.63 on Nov. 6. This should be viewed as a dip-buying opportunity, not a trend change. Bloom stock is still on a longer-term upward trajectory since March, so the bulls haven’t really relinquished control yet.
An Increasing Need
Prospective investors might wonder whether the coronavirus pandemic has increased or decreased the demand for clean hydrogen power.
Bloom Energy’s recently released third-quarter preliminary fiscal results should provide a definitive answer to that question.
Specifically, Bloom Energy recorded quarterly revenues of $200.3 million, which is pretty impressive considering the fact that there’s a pandemic in progress.
The company also reported a quarterly gross margin of 28% as well as adjusted EBITDA of $27.7 million. With that, Bloom Energy CEO K. R. Sridhar convincingly laid out the bullish argument for the Bloom Energy Server during a time of international crisis:
From the ongoing COVID-19 pandemic, to natural disasters occurring on either coast of the United States, and countries around the globe calling for immediate and necessary shifts to hydrogen and better forms of energy, we continue to see an increasing need for the sustainable and resilient energy power sources that Bloom Energy’s technology provides.
Turning up the Power
With the aforementioned quarterly fiscal stats in mind, it’s clear that there’s demand for the Bloom Energy Server. In case you need more convincing, though, let me direct your attention to one of Bloom Energy’s mega-sized clients.
Reportedly, Bloom Energy and SK Engineering and Construction are collaborating to provide power to two new clean-energy facilities in the Gyeonggi province of South Korea.
Amazingly, this project could potentially provide power to two entire cities. One power plant, located in the city of Hwasung, features a 19.8-megawatt fuel-cell energy deployment. Believe it or not, it’s “designed to generate enough electricity to power approximately 43,000 homes in the area.”
The other power plant is located in the city of Paju. It comprises an 8.1 megawatt fuel cell deployment and is designed to power approximately 18,000 homes in the area.
Sridhar called this project “a powerful proof point” of Bloom Energy’s ambitious energy plan. The CEO’s point is well taken as it takes a massive, scalable power generation system to cover two cities.
Hydrogen energy stocks are red-hot right now, but not all of these stocks are necessarily worth owning.
Bloom stock stands out as the CEO’s vision of clean, always-on hydrogen power is quickly turning into an ambitious yet attainable reality.
On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.
Louis Navellier had an unconventional start, as a grad student who accidentally built a market-beating stock system —with returns rivaling even Warren Buffett. In his latest feat, Louis discovered the “Master Key” to profiting from the biggest tech revolution of this (or any) generation.