Bloom Energy stock rises ahead of earnings: will the gains hold?

Bloom Energy stock rose by over 5% in the premarket session as investors bought the dip ahead of the upcoming financial results on July 28. It rose to $194.5, up modestly from Friday’s low of $184. Even so, the stock remains nearly 50% below the highest point this year. So, will it rebound or continue falling further?

Bloom Energy to report strong numbers

Bloom Energy is one of the fastest-growing companies in the energy industry, where it is used by firms across various industries like power and data centers. It generates electricity using solid oxide fuel cells (SOFCs), an electrochemical process rather than combustion.

The company has benefited substantially from the ongoing data center boom as electricity demand has surged. It has inked major deals with companies like Oracle, Nebius, and Brookfield. 

READ MORE: Bloom Energy stock has slumped: buy the dip or sell the rip ahead of earnings?

As a result, analysts expect its business to continue growing as the number of data centers in the US rise. The average estimate among analysts is that its revenue jumped by 106% in the second quarter to $827 million. 

For the third quarter, analysts expect the results will show that revenues jumped by 80% to $933 million. These are strong numbers for a company that has been in the industry for over two decades.

The annual revenue is expected to move from $2.02 billion last year to $3.74 billion this year. This growth is expected to accelerate next year, reaching $6.46 billion as it starts making money from its recently announced deals.

The most recently announced results revealed that Bloom Energy’s revenue jumped by 130% YoY to $750 million. Its gross margin also continued rising, reaching 30%, while the operating income hit $72.2 million.

Analysts are largely optimistic about Bloom Energy stock as the AI boom gains momentum. For example, JPMorgan boosted its target from $267 to $346, while Susquehanna boosted the target from $293 to $298. Baird sees the stock rising to $310, with the consensus target among analysts being $254. 

The options market, however, expects heightened volatility after its earnings release this week. It has an implied volatility of 264%, with its open interest rising to 160,000. It has a put/call ratio of 2.65, a sign that there are more puts than calls, which is usually highly bearish sign.

BE stock price technical analysis

Bloom Energy stock chart | Source: TradingView

The daily chart shows that the BE stock has plunged from the year-to-date high of $350 to a low of $184.90. It is hovering around the strong, pivot, reverse level of the Murrey Math Lines tool.

The stock has plunged below the crucial support level of $231, its lowest level on June 10 this year. It remains below the 100-day moving average, while the Average Directional Index (ADX) has jumped to 25, its highest level since June 3. 

Therefore, the stock will likely continue falling after its earnings this week. If this happens, the stock may fall to the ultimate support of $125. However, a rebound, potentially to the Major S/R pivot point is possible after earnings.