New Fortress Energy (NFE): Assessing Valuation After Steep Earnings Loss and Strategic Asset Sales

If you are eyeing New Fortress Energy (NFE) after its latest earnings drop, you are definitely not alone. The company just reported a much larger second-quarter net loss compared to last year, with results pressured by impairment charges and a substantial revenue decline after selling its Jamaican business. Management has responded by channeling the proceeds toward reducing debt and is openly evaluating further asset sales or capital-raising moves. This signals that liquidity and operational stability are clear priorities right now.

Against this backdrop, the stock’s momentum has been decisively negative, down almost 76% over the past year and falling sharply in the past three months. The company’s sale of its Jamaican assets and pause on dividends were already indicators of restructuring, and the recent earnings numbers have only amplified concerns about profitability. From a valuation angle, such sustained declines often get investors wondering if there is deep value on offer or if these moves simply reflect well-founded pessimism about the path forward.

After another tough quarter, is New Fortress Energy trading at a genuine discount with turnaround potential, or are expectations for a recovery still too optimistic at current prices?

Most Popular Narrative: 50.2% Undervalued

The prevailing narrative is that New Fortress Energy shares are trading at a major discount to their calculated fair value, with analysts projecting significant upside potential if company strategy plays out as forecast.

The FLNG asset coming online is expected to significantly contribute to future earnings as it allows optimization of the portfolio. This could lead to increased future returns, positively impacting revenue and earnings. The initiative to reduce debt and simplify the capital structure is expected to decrease debt costs, improving net margins and overall financial health.

Curious about what is powering this bold valuation call? The future fair value estimate hinges on a mix of aggressive growth drivers and a turnaround profit scenario that rivals sector leaders. Want to know which assumptions make this deep discount possible, and how close reality might come to delivering on that promise? The narrative’s full breakdown may surprise you.

Result: Fair Value of $4.92 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing dependence on key markets like Puerto Rico and the execution challenges of new expansions could quickly undermine the bullish outlook if conditions change.

Find out about the key risks to this New Fortress Energy narrative.

Another View: Our DCF Model Weighs In

Looking beyond the analyst targets, our DCF model suggests a less optimistic picture. Based on expected cash flows rather than market multiples, it implies New Fortress Energy is actually overvalued at current prices. Could the crowd be missing risks? Will future performance prove the fair value wrong?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out New Fortress Energy for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own New Fortress Energy Narrative

If you see things differently or want to dive deeper into the numbers yourself, it takes just a few minutes to craft your own take on New Fortress Energy. Do it your way

A great starting point for your New Fortress Energy research is our analysis highlighting 2 key rewards and 3 important warning signs that could impact your investment decision.

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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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