Clean Energy Fuels Corp. (NASDAQ:CLNE) just released its quarterly report and things are looking bullish. Results overall were solid, with revenues arriving 6.7% better than analyst forecasts at US$71m. Higher revenues also resulted in substantially lower statutory losses which, at US$0.01 per share, were 6.7% smaller than the analysts expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Clean Energy Fuels after the latest results.
Taking into account the latest results, the three analysts covering Clean Energy Fuels provided consensus estimates of US$305.4m revenue in 2021, which would reflect a considerable 9.2% decline on its sales over the past 12 months. Earnings are expected to tip over into lossmaking territory, with the analysts forecasting statutory losses of -US$0.087 per share in 2021. Before this latest report, the consensus had been expecting revenues of US$323.2m and US$0.063 per share in losses. So it's pretty clear the analysts have mixed opinions on Clean Energy Fuels after this update; revenues were downgraded and per-share losses expected to increase.
The average price target fell 8.3% to US$5.50, implicitly signalling that lower earnings per share are a leading indicator for Clean Energy Fuels' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Clean Energy Fuels at US$6.00 per share, while the most bearish prices it at US$5.00. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. One more thing stood out to us about these estimates, and it's the idea that Clean Energy Fuels'decline is expected to accelerate, with revenues forecast to fall 9.2% next year, topping off a historical decline of 4.6% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue grow 11% per year. So it's pretty clear that, while it does have declining revenues, the analysts also expect Clean Energy Fuels to suffer worse than the wider industry.
The Bottom Line
The most important thing to take away is that the analysts increased their loss per share estimates for next year. Unfortunately, they also downgraded their revenue estimates, and our data indicates revenues are expected to perform worse than the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Clean Energy Fuels' future valuation.
With that in mind, we wouldn't be too quick to come to a conclusion on Clean Energy Fuels. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Clean Energy Fuels analysts - going out to 2022, and you can see them free on our platform here.
We don't want to rain on the parade too much, but we did also find 2 warning signs for Clean Energy Fuels (1 is significant!) that you need to be mindful of.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email email@example.com.