Bloom Energyit’s (NYSE:BE) fuel cells run hotter but are expected to be less expensive than competing fuel cells from ballard and Plug hole, and they can basically run forwards and backwards. In this crazy live excerpt from “The High Energy Show”, recorded on February 15Motley Fool contributors Travis Hoium and Jason Hall take a closer look at Bloom Energy’s green hydrogen technology and strategy.
Travis Houm: Bloom Energy just released its results last week, and it’s a company, there were some questions in Slido about it, I think it’s going to be a decade from now. Bloom Energy has nearly $1 billion in revenue, and last year its revenue was up 22%, Q4 was up 37%. It’s a real business and they’re now turning the corner to profitability if we look at the graph here it’s revenue and margins are improving it’s because their costs are coming down, and they’re basically getting to the point where they reach the ladder. The reason I like them from a technology standpoint is that they’re a solid oxide fuel cell, which basically means their fuel cell gets hotter, but they should be less expensive than competing fuel cells made by Ballard and Plug Power, and they can essentially run forwards and backwards.
We’ve talked about the fact that it’s basically going to be an infrastructure piece for commercial buildings, for utilities. If all you have to do is hook up electricity and water to your Bloom fuel cell, then attach a tank of hydrogen, and you can run one way to do the electrolysis and store the hydrogen, then when you need that electricity, run in the other direction and generate electricity, it’s a very attractive business model. Now, we’re very early in their development in terms of bringing this to market, and they’ve basically just outlined their hydrogen strategy. It was usually a gray hydrogen company making fuel cells. They presented their green hydrogen strategy in the fall of 2020, I believe, and that’s the company whose charts I showed earlier. Their timelines are 2025, 2030. This could potentially be a really game-changing endeavor, it’s also very high risk, like Nicholas except that there are some real bargains out there right now. They partner with countries like South Korea, sell to companies like Apple. There is something substantial here with significant growth potential in the future.
Jason Hall: I’m thinking pure hydrogen games, Bloom is probably the safest. I think if you own it for five or 10 years your risk of permanent capital loss is probably pretty low, I really think it is because they have a real business, and you’re looking at Plug and Fuel cell and some of these others, they spend so much money and have to constantly remobilize capital, very different risk profile.
Travis Houm: To put some numbers in there, Bloom Energy’s price-to-sales ratio is 3.7.
Jason Hall: Law.
Travis Houm: Ballard is 30 years old.
Jason Hall: Law.
Travis Houm: Plug Power is almost 400.
Jason Hall: [laughs] Yeah.
Travis Houm: It’s crazy to me that the strongest company out of these three is also the cheapest.
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