Why Bloom Energy Stock Is Sinking 5% on Monday

What happened

Shares of energy-in-a-box fuel cell company Bloom Energy (NYSE: BE) are down 5.4% around 3 p.m. EDT Monday, the first trading day after a Barron's column criticized valuations in the renewable-energy sector over the weekend. 

So what

The column noted that fuel cell stocks Plug Power and Ballard Power have both quadrupled over the past year, and may be due for a pull-back. Bloom Energy is up "only" 64% in the same period -- but that's still 10 times the gain on the broader S&P 500, and may be indicative of similar irrational exuberance, but to a different degree. 

3 red arrows going down and crashing through the floor

Image source: Getty Images.

Now what

Investors are taking the warning to heart, selling off shares of all three companies today. Still, with Ballard stock down only 2.8% so far, and Plug down just a bit more (3%), the losses at Bloom Energy are nearly twice as bad. Is that fair?

It might not be.

Consider that while Bloom Energy has not yet reported a profit in the two years since its IPO, neither has Plug Power -- in more than 20 years. Ballard has earned full-year profits two or three times in its history, but not since 2008. So of the three, Bloom Energy has actually been losing money for the shortest period of time (as a publicly traded company, at least).

Moreover, while neither Ballard nor Plug is generating positive free cash flow (FCF) at present, Bloom at least was FCF-positive last year, and remains so on a trailing-12-month basis. While I can't say as I'm terribly optimistic about the prospects of any of these three companies right now, it seems to me that Bloom Energy's financials look to be the least bad among them.

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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.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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