Is BLDP expensive....Bought shares back in April and have accumulated along the way as the SP keeps rising, to date I'm up 250+%.
Came across the following today by motley fool, their track record is very good, for now I'm holding and won't be adding to my position at this time....
After the dreadful pandemic, the year 2021 will likely bring one of the best years for stocks. However, investors need to be cautious and pay attention to valuations while investing for the long term.
The case is quite similar with Ballard Power Systems(TSX:BLDP)(NASDAQ:BLDP). With its stock up 265% in the last 12 months, it seems to have priced beyond perfection. Investors’ rejoice was evident given Biden taking office and his focus on green energy. However, the rally was mainly driven by sentiment, and Ballard’s financials do not justify the stock’s current valuation.
Fuel cell stocks are on a roll driven by exuberance for alternative fuels and electric vehicles. Fuel cells carry out a chemical reaction, which converts hydrogen fuel into electricity. Thus, this is a relatively clean method of energy generation against the combustion of oil or gas.
Ballard Power is currently valued at nearly $10 billion that makes approximately $100 million in revenues annually. That’s a large disconnect and implies a pullback. Interestingly, the company’s revenue growth has also been terrible for several years. With losses widening for the last three years, its bottom-line trends are depressing as well. So, investors who are ready to pay hefty premium must be very careful.
Hydrogen fuel has great growth potential, and renewables leaders like China and Europe could see some serious traction in the area. However, it could take years for large-scale production and becoming economical. Ballard Power stock looks way expensive for its current fundamentals. It will likely see a pullback before going up again.