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. With the latest financial year loss of -US$3.8m and a trailing-twelve month of -US$20.4m, the US$434m market-cap amplifies its loss by moving further away from its breakeven target. The most pressing concern for investors is CLNE’s path to profitability – when will it breakeven? In this article, I will touch on the expectations for CLNE’s growth and when analysts expect the company to become profitable.
Consensus from the 3 Oil and Gas analysts is CLNE is on the verge of breakeven. They expect the company to post a final loss in 2020, before turning a profit of US$26m in 2021. Therefore, CLNE is expected to breakeven roughly 2 years from now. How fast will CLNE have to grow each year in order to reach the breakeven point by 2021? Working backwards from analyst estimates, it turns out that they expect the company to grow 96% year-on-year, on average, 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, however, take into account that typically oil and gas companies, depending on the stage of operation and resource produced, have irregular periods of cash flow. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.
Before I wrap up, there’s one aspect worth mentioning. 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.
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 essential aspects you should further research:
- 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.