Buffett Brain · Research note
Score updated 29 Oct 2026
BE· Industrials
Bloom Energy
Bloom Energy's extreme valuation metrics and lack of profitability make it a non-starter for Buffett's criteria.
Buffett fit
Weak fit
Owner
14
Durability
27
Management
0
Price
0
Score updated 29 Oct 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If we owned 100% of Bloom Energy, the next 10 years would focus on achieving sustainable profitability and reducing debt, as the current debt/equity ratio is 3.01.
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The 10-year test is concerning for Bloom Energy. The technology sector is prone to disruption, and the company's low margins and negative suggest it lacks a durable competitive advantage.
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Management has not demonstrated effective , with a 5-year share count CAGR of 8.5%, indicating dilution.
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The valuation of Bloom Energy is extremely stretched, with an EV/ of 1117.4 and an earnings yield of 0.01%.
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- The full reasoning behind all four pillars
- The 5-year price target and the return it implies
- What would change the call
- Graham, Lynch and Greenblatt on the same stock
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
4- 1Revenue CAGR of 20.12% over 5 years indicates growth potential.
- 2Current ratio of 5.03 suggests short-term obligations are well covered.
- 3 YoY growth of 72.54% shows potential for cash flow improvement.
- 4 of 8.24% is positive, albeit below sector standards.
Concerns
8- 1 of 13310.7 indicates extreme overvaluation.
- 2 of 4.01% is well below the sector top-quintile cutoff of 13.6%.
- 3Net debt/EBITDA of 3.17 exceeds Buffett's comfort zone of <2x.
- 4Negative 5-year average of -11.31% shows poor capital efficiency.
Price history
$228+629.6%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Bloom Energy designs and sells solid-oxide fuel cell systems for power generation, converting fuels like natural gas into electricity without combustion. The Bloom Energy Server targets critical infrastructure such as data centers and hospitals. With a 5-year revenue CAGR of 20.12%, growth is evident, but profitability remains elusive, as indicated by a net margin of just 0.25%.
How this analysis has moved
The call has held across 2 reviews.
Oct 25, 2026 → Oct 28, 2026
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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