Clean Energy Fuels Corp.’s (NASDAQ:CLNE): Clean Energy Fuels Corp. provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The US$487m market-cap posted a loss in its most recent financial year of -US$3.8m and a latest trailing-twelve-month loss of -US$13.8m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is CLNE’s path to profitability – when will it breakeven? Below I will provide a high-level summary of the industry analysts’ expectations for CLNE.
View our latest analysis for Clean Energy Fuels
According to the 3 industry analysts covering CLNE, the consensus is breakeven is near. They expect the company to post a final loss in 2020, before turning a profit of US$18m in 2021. So, CLNE is predicted to breakeven approximately 2 years from today. In order to meet this breakeven date, I calculated the rate at which CLNE must grow year-on-year. It turns out an average annual growth rate of 100% is expected, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
I’m not going to go through company-specific developments for CLNE given that this is a high-level summary, though, take into account that by and large an oil and gas business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing I’d like to point out is that CLNE has managed its capital judiciously, with debt making up 16% of equity. This means that CLNE has predominantly funded its operations from equity capital,and its low debt obligation reduces the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of CLNE which are not covered in this article, but I must stress again that this is merely a basic overview. For a more comprehensive look at CLNE, take a look at CLNE’s company page on Simply Wall St. I’ve also compiled a list of important factors you should look at:
- Valuation: What is CLNE worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether CLNE is currently mispriced by the market.
- Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Clean Energy Fuels’s board and the CEO’s back ground.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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