Bloom Energy's stock rocked as earnings miss, gloomy outlook prompt downgrades

By Tomi Kilgore

Departure of 'well respected' CFO after four years in the role is also weighing on the stock

Shares of Bloom Energy Corp. tumbled toward a four-year low on Friday, after the hydrogen and electricity generator's disappointing earnings report and outlook prompted ratings downgrades by analysts.

The separate announcement that Chief Financial Officer Greg Cameron was leaving the company, after four years in the role, was also seen by analysts as a reason to stop buying Bloom Energy's stock.

The stock (BE) tumbled 17.7% in premarket trading, to put it on track to open at a four-month low. It was also headed for the biggest one-day selloff since it plunged 20.2% on May 6, 2022.

KeyBanc Capital analyst Sangita Jain cut their rating on the stock to sector weight, after being overweight for at least two years.

Jain said that while interest in Bloom's servers appears "robust," uncertainty over the timing of shipments to Korea gives investors reason for pause.

"This, in combination with the departure of a well-respected CFO with no clear successor in place, drives our decision to step away until we get more clarity," Jain wrote in a note to clients.

The company reported late Thursday that fourth-quarter revenue dropped 22.8%, to $356.9 million from $462.6 million in the same period a year ago, while the FactSet consensus called for an increase to $470.8 million.

Founder and Chief Executive KR Sridhar said on the post-earnings conference call with analysts that Bloom had to "hit a pause" in deployments to Korea, while it adapted to new policy and procurement rules that were put in place.

"While that created a lower of our sales to Korea in second half of 2023 and a slow start in first half of 2024, they are back on track and we have expected a strong business in Korea in the second half of 2024 and in the future," Sridhar said, according to an AlphaSense transcript.

The company reported that it swung to fourth-quarter net income of $4.5 million, or 2 cents a share, from a loss of $47.2 million, or 23 cents a share, in the same period a year ago.

Excluding nonrecurring items, adjusted earnings per share fell to 7 cents missing the FactSet consensus of 9 cents.

For 2024, the company said it expects revenue of $1.4 billion to $1.6 billion. That compares with the FactSet consensus at the end of January of $1.75 billion.

J.P. Morgan's Mark Strouse cut his rating on Bloom's stock to neutral, after being at overweight since May 2023, and slashed the price target to $14 from $19.

"Despite prospects for long-term growth arising from product and market expansion, we are sidelined until there is better visibility into a more pronounced ramp in revenue and operating income," Strouse wrote.

Strouse added that he believed the departure of CFO Cameron "will be viewed negatively by investors" given his focus on improving margins since joining.

Bloom Energy had a market capitalization of $2.68 billion at Thursday's close. The stock had dropped 48.8% over the past 12 months, while the S&P 500 index SPX has rallied 23%.

-Tomi Kilgore

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02-16-24 0828ET

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