With strong leadership from top management, Bloom Energy Corporation (NYSE: $BE) is changing state policies, attracting important partnerships, and landing big contracts.
Bloom Energy Corporation (NYSE: $BE) is a company that focuses on designing, manufacturing, and selling solid-oxide fuel cell systems for on-site power generation, and has 4 international subsidiaries. It was founded in 2001, San Jose, C.A, and went public in 2018 after raising close to $1 billion.
They focus on large installations and not all their systems work with hydrogen. They have some fuel cells that use other fuels. But this is changing as BE is moving to hydrogen starting with its announcement in 2019.
Bloom Energy not only builds large humongous fuel cells for the industry but also services them, which leads to a recurring source of revenue. They maintain user relationships for the sale, but also the after service.
These large fuel cells each have a certain amount of proprietary technology that makes it difficult to switch to a different brand in a year or two after the sale.
BE’s new hydrogen-producing electrolyzers are using renewable power to pull the hydrogen out of water. Bloom starting has amassed 19 patents for solid oxide electrolyze technology.
$BE’s revenue in the second quarter was up 19% from the first quarter. After adjustments EBITDA was $2.1 million. This was the result of strong margins and reduced operating costs. Over the last twelve months, its EPS was at -$1.97.
During the same period the company’s revenue growth was 17.92% and EPS growth was 43.39%.
The company’s stock was trading at $17.10 as of 11th November 2020. It reached a high of $19.67 in August 2020 and saw its lowest of $2.44 last October 2019.
Bloom Energy is continuing to fuel their expansion by winning over key partnerships
Despite the challenges with COVID-19, Bloom Energy installed 20% more systems than in Q1. This includes a six-megawatt system for Long Island Power Authority and an expanded relationship with Duke Energy.
One key partner of Bloom Energy is SK Engineering and Construction located in South Korea. This partnership has already made sales of 120 megawatts of fuel cells, generating income streams of $1 billion from both equipment and future service revenue.
Bloom Energy made another agreement with Samsung Heavy Industries to develop fuel cell-powered ships. Samsung Heavy Industries will replace all existing main and generator engines using Bloom energy solid oxide fuel cells. This will enable ship owners to comply with the International Maritime Organization 2030 and 2050 requirements. They are working to roll out the designs by 2022.
South Korea’s current laws mandate additional construction of 15,000 megawatts hydrogen fuel cells along with 1,200 hydrogen filling stations by 2040 – along with a requirement of 6.2 million hydrogen-fulled cars by 2040.
A true goldmine for $BE.
Key leadership is required to spearhead the fuel cell industry
K.R. Sridhar is the founder and CEO of Bloom Energy. Mr. Sridhar has strongly held views about the climate crisis. He holds beliefs in solving the crisis through technology and conservation.
Before founding Bloom Energy, Mr. Sridhar managed a team from NASA to develop technologies to sustain life on Mars. Before that, he was an aerospace and engineering professor at the University of Arizona has over fifty publications and has served on many technical boards. He has managerial experience and is a strong leader for a firm that researches and develops new products in this domain.
K.R. Sridhar demonstrated during COVID-19 a sense of social responsibility by leading his team to work on ventilators by repairing and supplying 1,200 ventilators. He not only understands engineering, but he was also a professor in the field. Bloom also innovated and obtained FDA approval for a splitter that can help four patients to benefit from one ventilator.
At the end of Q2 BE brought in Carl Guardino to serve as Executive Vice President, Government Affairs. His prior post as CEO of Silicon Valley Leadership Group amply prepares him for this role. He will work with policymakers to make $BE reach its goal of an “energy resilient world”.
Investing in Bloom Energy (NYSE: $BE) involves risk but the company has a very positive outlook despite the COVID times and has seen a continuous revenue stream.
With its presence in the utility and industrial space and with the current sentiment in markets like China, South Korea, the UK, and the EU, state money will be pouring into the industry.
The key is to establish those relationships first.
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