Key insights
- BMO Capital reiterated a Market Perform rating on Bloom Energy after the company announced an expanded supply agreement with Oracle. The agreement boosted the stock price in after-hours trading. While the analyst views the announcement as positive, the stock's high valuation relative to EBITDA suggests limited upside. The stock is up significantly over the past year, and InvestingPro data suggests it is overvalued.
Investing.com - BMO Capital reiterated a Market Perform rating and $149.00 price target on Bloom Energy Corp. (NYSE:BE) following the company’s announcement of an expanded supply agreement with Oracle.
Bloom Energy announced after market close that it is working with Oracle to expand its existing supply agreement from 1.2 gigawatts to 2.8 gigawatts over coming years. The announcement pushed the stock price above $200 per share in after-hours trading, up 16%. The surge extends an impressive rally, with the stock up 30% over the past week and posting a remarkable 887% gain over the last year, according to InvestingPro data. However, InvestingPro analysis suggests the stock is currently overvalued relative to its Fair Value—a finding that aligns with the platform’s ProTip highlighting that BE is "trading at a high EBITDA valuation multiple."
BMO Capital said the announcement is positive as it implies the current contracted supply agreement is 20% larger than previously thought and presumably going well. The firm noted that after calculating maximum utilization with expansion to 5 gigawatts, the stock is trading at 38 times 2027 EBITDA.
The firm also said the stock trades at 18.2 times 2030 EBITDA in a maximum capacity utilization scenario. BMO Capital maintained its Market Perform rating on the shares.
The expanded agreement represents an increase of 1.6 gigawatts from the previous supply commitment between Bloom Energy and Oracle.
In other recent news, Bloom Energy has reported significant financial achievements and strategic partnerships. The company exceeded its 2025 performance targets, achieving total revenue of $2.02 billion against an expected $1.75 billion and a non-GAAP operating income of $221 million, surpassing the target of $180 million. This financial success was noted by Baird, which reiterated its Outperform rating and maintained a price target of $172. Additionally, Bloom Energy announced an expanded partnership with Oracle, securing a deal to supply up to 2.8 gigawatts of fuel cell systems for Oracle’s AI and cloud infrastructure. An initial 1.2 gigawatts of capacity has already been contracted, with deployment underway in the United States. In a related development, Bloom Energy issued a warrant to Oracle, allowing the purchase of over 3.5 million shares at a set exercise price. Meanwhile, Jefferies adjusted its price target for Bloom Energy to $97, citing elevated expectations and competition, while maintaining an Underperform rating. These developments reflect both the company’s recent successes and the challenges it faces in the current market landscape.
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