BE Stock Outperforms Its Industry in the Past Six Months: How to Play?

Shares of Bloom Energy Corporation BE have skyrocketed 408.3% in the past six months compared with the Zacks Alternative Energy - Other industry’s rise of 22.6%. The company has also outperformed the Zacks Oil & Energy sector’s return of 12.3% and the S&P 500’s growth of 15.4% in the same time frame.

Bloom Energy is benefiting from the rising demand for clean power from artificial intelligence-based data centers and customers turning to distributed energy solutions to avoid transmission and distribution bottlenecks.

Price Performance (Six Months)

Another industry player, Talen Energy Corporation TLN has gained a whopping 54.7% in the past six months, outperforming its industry, the sector and the S&P 500.

Bloom Energy is trading above its 200-day simple moving averages (SMAs), signaling a bullish trend. The 200-day SMA is a key indicator for traders and analysts to identify support and resistance levels. It is considered particularly important, as this is the first marker of an uptrend or downtrend of the stocks.

BE 200 Day SMA

Should investors add BE to their portfolio solely because of its ongoing price gains? Let us take a closer look at the key factors that can help determine whether now is the right time to consider investing in the stock.

Factors Acting as a Tailwind for Bloom Energy

Soaring demand for clean and reliable power, driven by AI-powered data centers, crypto-mining operations and the re-shoring of U.S. manufacturing, is creating significant opportunities for Bloom Energy. The company’s Energy Server platform provides efficient, dependable and low-emission power solutions for commercial users and utilities alike.

Using its proprietary solid oxide technology, the system generates electricity through electrochemical fuel conversion, eliminating the need for traditional combustion.

As power demand continues to exceed supply, bottlenecks in the development of new transmission and distribution lines can be noticed. Bloom Energy’s Energy Server system is highly versatile, capable of operating in parallel with the grid by connecting directly to a customer’s main electrical feed and it removes losses typically seen in centralized grid systems. The modular design of Bloom Energy’s solution allows multiple Energy Server systems to be clustered in different configurations, delivering scalable power capacity ranging from a few hundred kilowatts to several hundred megawatts.

Bloom Energy expects growing utility adoption of its Energy Server systems, whether for grid-wide support or on-site generation for specific customers. As product costs fall and utility rates rise, the company sees its solutions becoming more cost-effective across more regions and sectors. Bloom Energy signed multiple utility agreements and anticipates even broader deployment ahead, with utilities using its Energy Server both as front-of-the-meter resources and customer-specific power solutions.

BE will also benefit from the government incentives, which promote clean energy production. The company is also planning to roll out a new manufacturing unit in California to meet the rising demand for its products.

Bloom Energy’s Earnings Estimates Moving North

The Zacks Consensus Estimate for Bloom Energy’s 2025 and 2026 earnings per share reflects year-over-year growth of 92.86% and 48.98%, respectively.

The same for Talen Energy’s 2025 earnings per share reflects a year-over-year decline of 37.87% and for 2026 year-over-year growth of 290.2%.

BE Stock Returns Better Than Its Industry

The return on equity (“ROE”) measures how well a company is utilizing its shareholders’ funds to generate profits. ROE compares net income with shareholders' equity.

ROE of Bloom Energy was 29.39% compared with the industry average of 7.89%.

Another company operating in the same industry, Ormat Technologies’ ORA ROE of 5.35% is lower than the industry and Bloom Energy.

BE is Trading at a Premium Valuation

Bloom Energy is currently trading at a premium valuation compared with its industry, with the forward 12-month price-to-sales (P/S) ratio at 8.73X. The industry is currently trading at 5.37X.

Ormat Technologies is also trading at 5.9X, a premium valuation compared with its industry.

Rounding Up

Bloom Energy maintains steady performance, supported by increasing demand for clean energy and its ability to provide quick energy solutions to customers. The demand for Bloom Energy’s service is going to rise as it can provide clean energy to meet each customer's needs, bypassing the requirements of transmission and distribution lines.
 
Bloom Energy’s rising earnings estimates, strong price performance and ROE better than the industry make it attractive for investors.

However, considering the current premium valuation, we suggest investors maintain their position in this Zacks Rank#3 (Hold) stock.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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