Bloom Energy stock (NYSE: BE), a company that sells solid oxide fuel cells for electricity generation, has declined by about 11% over the last month (around 21 trading days), underperforming the S&P 500 which remains down by 3% over the same period. While Bloom has actually fared pretty well in recent months, driven by strong quarterly, rising demand for clean energy products following the disruption in the oil and gas market following Russia’s invasion of Ukraine, there are a couple of factors that likely impacted the stock over the past month. Firstly, Bloom outlined a 13 million-share public offering last month at $26 per share with gross proceeds pegged at roughly $338 million. This dilutive fundraising is likely to have partly impacted the stock. Separately, the Fed has indicated that it would continue to raise interest rates despite inflation slowing down marginally. This has impacted high-growth and futuristic stocks to an extent.
Given that BE stock is down 11% over the last month, will it continue its downward trajectory, or is a recovery imminent? Going by historical performance, there is a higher chance of a decline in BE stock over the next month. Out of 348 instances in the last four years that BE stock saw a twenty-one-day decline of 11% or more, 163 of them resulted in BE stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 163 out of 348, or a 47% chance of a rise in BE stock over the coming month, implying that BE stock may not be a good bet in the near term. See our analysis on Bloom Energy Stock Chance of A Rise for more details.
Calculation of ‘Event Probability’ and ‘Chance of Rise’ using last four years’ data
- After moving -6% or more over a five-day period, the stock rose in the next five days on 52% of the occasions.
- After moving -4.5% or more over a ten-day period, the stock rose in the next ten days on 46% of the occasions.
- After moving -11% or more over a twenty-one-day period, the stock rose in the next twenty-one days on 47% of the occasions.
This pattern suggests that there is not a very strong chance of a rise in BE stock in the near term.
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