Mizuho upgrades Bloom Energy to Outperform on stronger execution, margin expansion

Investing.com -- Mizuho upgraded Bloom Energy to "Outperform" from "Neutral" and set a $242 price target, citing stronger-than-expected execution, accelerating margin expansion and improving operating leverage, while arguing the recent share-price pullback has created an attractive entry point.

The brokerage said Bloom delivered revenue and product shipments above its expectations, with operating leverage materializing earlier than anticipated. It added that the company continues to benefit from its time-to-power advantage, more than $27 billion of financing capacity, validation from all major U.S. hyperscale customers and a backlog that is growing faster than revenue.

Mizuho also said recent progress on permitting in New Mexico provides an incremental positive for the company's growth outlook.

While the brokerage raised its earnings estimates to reflect stronger operating leverage and higher product shipments, it trimmed its price target from its previous level due to lower service revenue assumptions following a correction to quarterly run rates, as well as modest valuation multiple compression across peer equipment and services companies.

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