Yes, that was impressive reading, thanks for the link!
My favorite in the hydrogen sector has long been Plug, but BE is quickly catching up and joining the same league. Bloom is working on some areas that Plug doesn’t have, at least not as actively at this stage. First, pink hydrogen. Based on KR’s speeches, Bloom has excellent opportunities with its SO-lysers in the nuclear power sector. Another promising avenue is waste-to-energy, where projects are smaller but numerous. Third, the marine sector, where the first deliveries have already been made. Then, if we consider data center projects, which both companies are enthusiastic about, Bloom might even have a slight head start because their energy server is already a fully developed product and runs on several fuels. Plug has mainly only prototyped its backup power plants with MS. Of course, giant customers will also require more or less customization of their plants from Bloom. What’s also fascinating about both companies is that they are involved in both main sectors of the hydrogen economy: hydrogen production and use, i.e., electrolyzers and fuel cells.
Last week, I downloaded figures for a few companies from Marketscreener, from which I could share, for example, these:
| EV/Rev |
2022 |
2023 |
2024 |
|
|
|
|
| Plug |
8.0 |
5.8 |
4.0 |
| Bloom |
2.5 |
1.9 |
1.4 |
| McPhy |
11.3 |
6.8 |
3.4 |
| NEL |
18.7 |
12.0 |
8.17 |
| Enphase |
16.5 |
11.9 |
9.4 |
I included NEL and McPhy for comparison, even though they are not fuel cell manufacturers. However, the explosive growth of electrolysis will certainly benefit these companies too. NEL was also my first hydrogen stock once upon a time, but I got rid of it when it started to feel like Løkke’s speeches were repeating themselves, and the can was being kicked down the road, until Løkke himself resigned. I also somewhat doubted how the Norwegians would access larger markets, where there’s often a bit of “home-team” favoritism. But this is not a recommendation in one direction or another. NEL may do excellently in the future if/when lyser demand comes even close to forecasts.
Most of all, in this comparison, I wonder about the expensiveness of European companies and/or the cheapness of US companies. All have growth forecasts roughly in the same ballpark, and all are operating at a loss. All of their cash reserves seem to last until the predicted profitability, so I don’t really understand why there are such large valuation differences. In fact, Bloom is the closest to positive cash flow among these, and next year should be in the black, even though capacity is doubling again. Yet, Bloom is by far the most affordable.
As I was reading this Bloom report, Enphase came to mind, which also has an Indian leader, by the way. I believe Bloom has every chance to follow Enphase’s path in valuation if the business progresses as communicated by the company. Enphase was also once a whipping boy and a favorite target for short-sellers, but strong and profitable growth quickly ended the games, resulting in the figures shown in the table above. Hope is a good thing to live by, as someone once said…
