Those who invested in Bloom Energy (NYSE:BE) three years ago are up 133%

It might be of some concern to shareholders to see the Bloom Energy Corporation (NYSE:BE) share price down 12% in the last month. But that doesn't undermine the rather lovely longer-term return, if you measure over the last three years. In fact, the share price is up a full 133% compared to three years ago. It's not uncommon to see a share price retrace a bit, after a big gain. If the business can perform well for years to come, then the recent drop could be an opportunity.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

Check out our latest analysis for Bloom Energy

Because Bloom Energy made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years Bloom Energy has grown its revenue at 13% annually. That's a very respectable growth rate. It's fair to say that the market has acknowledged the growth by pushing the share price up 33% per year. The business has made good progress on the top line, but the market is extrapolating the growth. Some investors like to buy in just after a company becomes profitable, since that can be a powerful inflexion point.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Bloom Energy is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Bloom Energy in this interactive graph of future profit estimates.

A Different Perspective

While it's never nice to take a loss, Bloom Energy shareholders can take comfort that their trailing twelve month loss of 15% wasn't as bad as the market loss of around -22%. Longer term investors wouldn't be so upset, since they would have made 33%, each year, over three years. It's possible that the recent share price decline has more to do with the negative broader market returns than any company specific development. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Bloom Energy , and understanding them should be part of your investment process.

But note: Bloom Energy may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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