DIA415.36+6.58 1.61%
SPX5,638.94+117.42 2.13%
IXIC17,754.09+451.07 2.61%

Why Bloom Energy Stock Dropped on Tuesday

The Motley Fool·03/04/2025 17:27:15
Listen to the news

Bloom Energy (NYSE: BE) delivered a powerful earnings report last week, but that good news isn't helping this hydrogen fuel cell company Tuesday. Reports of a big "block trade" -- a large shareholder selling 3 million shares of Bloom all at once -- have investors spooked.

After dropping by more than 13% in morning trading, as of 12:20 p.m. ET, Bloom Energy stock was down by about 5%.

Start Your Mornings Smarter! Wake up with Breakfast news in your inbox every market day. Sign Up For Free »

Bloom Energy earnings

Bloom Energy beat analysts' forecasts for Q4 with a stick on Thursday, reporting adjusted profits of $0.43 per share where analysts foresaw only $0.31, and revenue of $572.4 million, which was much more than forecast. (GAAP profits also rose impressively to $0.38 per share versus just $0.02 in the prior-year period.)

2024 was a record year for revenue at Bloom, with sales rising 10% from 2023 levels to $1.5 billion. And the company finished the year strong, with 60% sales growth in Q4, and a huge 1,240 basis point increase in gross profit margin.

Bloom even hung its hat on the AI revolution, saying that its hydrogen power boxes are "the solution of choice for powering AI," and asserting that it was ready to provide gigawatt-scale hydrogen fuel cell power for customers this year. Management forecast that sales would grow to approximately $1.75 billion in 2025, ahead of Wall Street forecasts.

Is Bloom stock a sell?

All this good news was undone in a moment, however, when on Monday night TheFly.com reported that a shareholder had engaged Morgan Stanley to help it sell 3 million shares of Bloom Energy at once, at a price between $23.25 per share and $23.42 per share -- the top of the range being where Bloom stock closed Monday's trading session -- and that the shares ended up selling at the very bottom of that range Tuesday.

Someone apparently wanted out of Bloom stock in a hurry, and that impatience is panicking other shareholders. Nor can I necessarily say that selling is a bad idea. Bloom remains unprofitable, and while it's free cash flow positive, it's trading for more than 160 times cash profits.

It's an overpriced stock, and overpriced stocks probably should be sold.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Risk Disclosure: The content of this page is not an investment advice and does not constitute any offer or solicitation to offer or recommendation of any investment product. It is for general purposes only and does not take into account your individual needs, investment objectives and specific financial circumstances. All investments involve risk and the past performance of securities, or financial products does not guarantee future results or returns. Keep in mind that while diversification may help spread risk it does not assure a profit, or protect against loss, in a down market. There is always the potential of losing money when you invest in securities, or other financial products. Investors should consider their investment objectives and risks carefully before investing. For more details, please refer to risk disclosure.
During the campaign period, US stocks, US stocks short selling, US stock options, Hong Kong stocks, and A-shares trading will maintain at $0 commission, and no subscription/redemption fees for mutual fund transactions. $0 fee offer has a time limit, until further notice. For more information, please visit:  https://www.webull.hk/pricing
More than 40M Downloads Globally : data based on Webull Technologies Limited's internal statistics as of July 14, 2023.
Webull Securities Limited is licensed with the Securities and Futures Commission of Hong Kong (CE No. BNG700) for carrying out Type 1 License for Dealing in Securities, Type 2 License for Dealing in Futures Contracts and Type 4 License for Advising on Securities.
Language

English

©2025 Webull Securities Limited. All rights reserved.