SKN | Barclays Sees 35% Potential Upside in Bloom Energy Despite Lowering Its Price Target

Key Takeaways:

• Barclays upgraded Bloom Energy to Overweight on November 3, maintaining a constructive view despite reducing its price target to $289, approximately 35% above the share price at the time of the call.
• The bank’s positive assessment follows record third-quarter revenue and a third increase in Bloom Energy’s full-year guidance, although negative cash flow and rising unbilled revenue remain important concerns.
• Customer deposits increased to $661 million at September 30, compared with $78 million at the end of 2025, providing a central element of Barclays’ investment thesis.

Barclays has strengthened its outlook on Bloom Energy, upgrading the fuel-cell technology company to Overweight while lowering its price target to $289. The November 3 decision is notable because the bank remains constructive even as it adjusts its valuation expectations. With the revised target implying approximately 35% upside from the prevailing share price, Barclays is effectively arguing that the market may be underestimating Bloom Energy’s commercial momentum and the financial support provided by customer commitments.

Why Barclays Maintains an Overweight Rating

The bank’s upgrade comes after Bloom Energy delivered record revenue in the third quarter and raised its full-year guidance for the third time. These developments indicate stronger operating momentum and reinforce the company’s position in the market for distributed power generation, particularly as demand for reliable electricity infrastructure gains importance.

However, Barclays’ decision is not simply a reaction to stronger reported revenue. Its assessment places considerable weight on the company’s customer deposits, which rose to $661 million as of September 30, from $78 million at the end of 2025. For Barclays, this increase provides evidence of customer financial commitments and potentially stronger visibility over future business activity.

The Cash Flow Question Behind Barclays’ Valuation

Despite the encouraging revenue performance, Bloom Energy’s third-quarter results also presented a significant financial consideration: cash flow turned negative as unbilled revenue accumulated. This distinction matters because revenue recognition does not necessarily mean that cash has already been collected. Delays between delivering products, recording revenue and receiving payment can place pressure on working capital even when reported sales are expanding.

Barclays’ thesis therefore depends partly on whether the company can convert its growing commercial activity and customer deposits into realised cash. The deposit balance is encouraging, but it should not be treated as equivalent to unrestricted operating cash or proof that future collection risks have disappeared. Investors will need to monitor billing, collections and cash conversion alongside revenue growth.

What Barclays’ $289 Target Implies for Investors

At its revised $289 price target, Barclays’ valuation represents approximately 59 times forward earnings, below Bloom Energy’s three-year historical average of 76 times. This comparison suggests that the bank sees room for valuation support if earnings growth develops as expected. Nevertheless, a multiple of 59 times still represents a demanding valuation, leaving the shares sensitive to execution setbacks, slower growth or weaker cash generation.

For sophisticated investors assessing exposure to the energy infrastructure sector, Barclays’ position highlights an important distinction between commercial growth and financial conversion. The bank sees potential value in Bloom Energy’s expanding customer commitments, but the investment case ultimately requires those commitments to translate into sustainable earnings and cash flow. Future quarterly results, particularly the movement in unbilled revenue, customer deposits and operating cash generation, will be critical in determining whether the anticipated upside is justified.

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