Does the Recent 17% Drop Signal a Turning Point for Bloom Energy in 2025?

If you have been watching Bloom Energy, you will know just how wild the ride has been lately. The stock’s year-to-date return clocks in at a staggering 200.9%, and over the past year, shares have rocketed up an eye-popping 557.2%. Even pulling back to a longer three-year window, Bloom’s up more than 250%. That kind of growth is enough to make any investor sit up and ask: is this the beginning of a new era for clean energy stocks, or is the risk starting to overshadow the opportunity?

The last month alone has given us a taste of how quickly sentiment can turn. After soaring 38.3% in just 30 days, Bloom’s price slipped 17.2% this past week. These big swings have a lot to do with shifting market views on alternative energy and the evolving conversation around energy security. As governments and big industries look to diversify power sources, companies like Bloom that provide scalable, renewable energy solutions keep finding their way into the spotlight.

But the real question most investors are asking is whether there is still room for growth, or if Bloom Energy is now priced for perfection. According to a quick look at its valuation score, Bloom is undervalued on just 2 out of 6 standard checks, suggesting the picture is more complicated than simple growth would imply. In the next section, I will break down each valuation perspective and show you why looking beyond the usual numbers might give you the edge in judging where Bloom Energy really stands.

Bloom Energy scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Bloom Energy Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s worth by projecting how much cash it will generate in the future and discounting those amounts back to today’s dollars. For Bloom Energy, this means taking forecasts of cash the company is expected to produce and then adjusting those values to account for the time value of money. In other words, it considers what those future dollars are really worth now.

Currently, Bloom Energy’s latest twelve month Free Cash Flow sits at $1.2 million. Looking ahead, analysts project Free Cash Flow to rise sharply, reaching $784 million by 2029, with interim growth markers along the way. Beyond analyst coverage, Simply Wall St’s extrapolation sees Free Cash Flow potentially moving well above $2 billion within ten years, highlighting bold growth expectations.

When all these projections are run through the DCF framework, the resulting intrinsic value for Bloom Energy comes in at $91.18 per share. This is about 22.9% above the current share price, indicating the market may be undervaluing the company given its long-term cash generation potential.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Bloom Energy.

Our Discounted Cash Flow (DCF) analysis suggests Bloom Energy is undervalued by 22.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Bloom Energy Price vs Sales

The Price-to-Sales (P/S) ratio is often used to value companies that are not yet consistently profitable but are experiencing rapid growth. Revenue is less volatile than earnings during early-stage expansion. For fast-growing firms like Bloom Energy, the P/S ratio offers investors a way to evaluate the company’s value relative to its ability to generate sales, rather than focusing solely on earnings, which can fluctuate due to reinvestment or scaling costs.

Growth expectations and perceived risk naturally influence what is considered a "fair" P/S multiple. Companies with higher growth potential and lower risk profiles often earn a premium, while those facing more uncertainty or limited growth are typically valued at a discount. For context, Bloom Energy currently trades at a P/S ratio of 10.09x. This is notably higher than both its industry average of 2.24x and the peer average of 5.50x. This reflects elevated expectations around its future revenue growth and market position.

To move beyond the limitations of peer and sector comparisons, Simply Wall St introduces the concept of the Fair Ratio. This proprietary metric determines what a reasonable P/S multiple should be by factoring in elements such as Bloom’s projected growth, profitability margin, industry dynamics, company size, and risk. In Bloom’s case, the Fair Ratio is calculated at 4.84x, which is considerably lower than the current P/S ratio. This suggests the market is currently pricing in a lot of optimism, possibly more than what is justified by fundamentals and risk profile.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Bloom Energy Narrative

Earlier we mentioned there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply your perspective on a company’s future. It’s the story you tell about its prospects and risks, captured in your own estimates of revenue, profit margins, and what you think is a fair value. Narratives connect the dots between a company’s big-picture story, a personalized financial forecast, and a resulting fair value, giving much more context than the numbers alone. Narratives are easy to create and update directly on Simply Wall St’s Community page, an interactive space used by millions of investors.

This approach helps you decide when to buy or sell by comparing the fair value from your Narrative to the current market price. Your decisions are always grounded in your beliefs and up-to-date information. As key events like earnings releases or major news happen, Narratives adjust automatically, keeping your thesis relevant. For example, one investor might believe Bloom Energy’s margin growth and data center demand justify a bullish fair value of $48.00. Another, more cautious investor, focuses on execution risks and sets their value as low as $10.00. By using Narratives, you can confidently invest based on your own outlook, not just analyst averages.

Do you think there's more to the story for Bloom Energy? Create your own Narrative to let the Community know!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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