Why Bloom Energy Stock Sank Today

Bloom Energy (NYSE: BE) stock won a price target hike from Bank of America Securities this morning, with analyst Dimple Gosai raising her target price on the hydrogen fuel cell company by 50%, to $39 per share.

That news isn't quite as good as it sounds, however, as Gosai left her "underperform" rating on Bloom stock unchanged. As a result, Bloom stock is down 3.1% through 2:30 p.m. ET.

Image source: Getty Images.

What Bank of America says about Bloom Energy stock

In today's note, Gosai praises Bloom management for "better execution" on its business, as StreetInsider.com reports. Nevertheless, Gosai calls consensus estimates for the company's revenue through 2028 "ambitious" and fully factored into the stock's $92 share price already -- such that the " valuation leaves limited upside potential" at this time.

Gosai forecasts 40% annual growth in the number of fuel cells Bloom ships (as measured by megawatt) through 2028, but only if Bloom can manage "a significant increase in new awards." Simply executing on existing contracts and fulfilling existing backlogged orders won't suffice.

Is Bloom stock a buy?

Simply put, Gosai sees much risk in Bloom shares at its current price -- despite upping her price target to align just a little bit better with what the rest of the stock market thinks about Bloom. One factor to watch out for, especially, says the analyst, is "muted order activity vs splashy headlines."

Those two can be hard to distinguish, however, so here's two other things to watch out for:

Bloom stock currently costs a pricey 12 times trailing sales, and a simply insane 1,190 times trailing earnings. Until those metrics improve, Bloom stock is a sell.

Bank of America is an advertising partner of Motley Fool Money. Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.