Shares of Bloom Energy Corporation BE have skyrocketed 199.1% in the past six months compared with the Zacks Alternative Energy - Other industry’s rise of 12.7%. The company has also outperformed the Zacks Oil & Energy sector’s return of 29.5% and the S&P 500’s growth of 10.2% in the same time frame.
Bloom Energy is gaining from increasing demand for clean energy from AI-driven data centers, as well as from customers increasingly adopting distributed energy solutions to bypass transmission and distribution constraints.
Price Performance (Six Months)
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Another industry player, Talen Energy Corporation TLN, operates a fleet of power generation assets that deliver reliable, dispatchable electricity to meet the around-the-clock needs of commercial, industrial and residential customers. Talen Energy has lost 5.1% in the past six months, underperforming its industry, the sector and the S&P 500.
Bloom Energy is trading above its 50 and 200-day simple moving averages (SMAs), signaling a bullish trend.
The 50 and 200-day SMAs are key indicators 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’s 50 and 200-Day SMA
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Should you add BE to your portfolio solely based on its recent positive price movement? Let’s take a closer look at the underlying factors that can help investors determine whether this is the right time to include the stock in their portfolio.
Tailwinds Boosting Bloom Energy’s Performance
As electricity demand continues to exceed available supply, shortcomings in transmission and distribution infrastructure are becoming increasingly evident. Bloom Energy addresses these challenges with its Energy Server platform, which can operate alongside the grid by connecting directly to a customer’s primary electrical supply, thereby minimizing losses tied to centralized power systems. The system’s modular architecture also enables multiple units to be integrated, allowing power generation to scale from a few hundred kilowatts to several hundred megawatts.
Bloom Energy’s Energy Server platform provides efficient, reliable and clean power solutions for commercial and utility customers. Leveraging proprietary solid oxide technology, the system produces electricity through electrochemical conversion instead of combustion. The company is well positioned to benefit from growing demand for dependable clean energy, fueled by the expansion of AI data centers, crypto-mining activities and the reshoring of U.S. manufacturing operations.
Bloom Energy continues to invest in research and development to improve module efficiency, reduce manufacturing costs and strengthen profit margins. The company is also positioned to benefit from government incentives aimed at supporting clean energy initiatives.
BE’s Earnings Estimates Moving North
The Zacks Consensus Estimate for Bloom Energy’s earnings per share for 2026 and 2027 increased 50.39% and 38.19%, respectively, in the past 60 days.
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The same for Talen Energy’s earnings per share for 2026 decreased 3.91% and its 2027 estimate increased 5.36%, in the past 60 days.
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 43.41% compared with the industry average of 6.92%.
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Another company, Plug Power Inc. PLUG, is also working to produce clean energy for its customers. Plug Power is developing an integrated “hydrogen highway” across North America and Europe, covering the full value chain from green hydrogen production to delivery. Plug Power’s ROE is lower than its industry.
BE is Trading at a Premium
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 18.74X. The industry is currently trading at 5.33X.
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Summing Up
Bloom Energy continues to demonstrate resilient performance, supported by rising demand for clean energy and its ability to provide rapid and dependable power solutions. Demand for the company’s offerings is expected to grow further as it delivers customized clean energy solutions directly to customers, reducing reliance on traditional transmission and distribution infrastructure.
Bloom Energy appears to be an attractive investment option, backed by improving earnings estimates, strong stock price momentum and a return on equity that surpasses industry peers.
Yet, given the stock’s premium valuation at current levels, we recommend investors retain their position in this Zacks Rank #3 (Hold) stock rather than add fresh exposure.
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).