Yahoo Finance Clean Energy Fuels Corp. (NASDAQ:CLNE) Analysts Just Cut Their EPS Forecasts Substantially
Market forces rained on the parade of Clean Energy Fuels Corp. (NASDAQ:CLNE) shareholders today, when the analysts downgraded their forecasts for this year. Revenue and earnings per share (EPS) forecasts were both revised downwards, with analysts seeing grey clouds on the horizon.
Following the latest downgrade, the six analysts covering Clean Energy Fuels provided consensus estimates of US$394m revenue in 2023, which would reflect a small 6.1% decline on its sales over the past 12 months. Losses are supposed to balloon 63% to US$0.43 per share. However, before this estimates update, the consensus had been expecting revenues of US$498m and US$0.32 per share in losses. So there's been quite a change-up of views after the recent consensus updates, with the analysts making a serious cut to their revenue forecasts while also expecting losses per share to increase.
See our latest analysis for Clean Energy Fuels
The consensus price target fell 19% to US$10.69, implicitly signalling that lower earnings per share are a leading indicator for Clean Energy Fuels' valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Clean Energy Fuels, with the most bullish analyst valuing it at US$22.00 and the most bearish at US$7.00 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely differing views on what kind of performance this business can generate. As a result it might not be possible to derive much meaning from the consensus price target, which is after all just an average of this wide range of estimates.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Clean Energy Fuels' past performance and to peers in the same industry. Over the past five years, revenues have declined around 1.3% annually. Worse, forecasts are essentially predicting the decline to accelerate, with the estimate for an annualised 6.1% decline in revenue until the end of 2023. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenue shrink 6.3% per year. So it's pretty clear that, while it does have declining revenues, Clean Energy Fuels is expected to suffer at about the same rate as its industry.
The Bottom Line
The most important thing to note from this downgrade is that the consensus increased its forecast losses this year, suggesting all may not be well at Clean Energy Fuels. Unfortunately they also trimmed their revenue estimates, although the company is expected to perform at about the same rate as the wider market this year. Given the scope of the downgrades, it would not be a surprise to see the market become more wary of the business.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. We have estimates - from multiple Clean Energy Fuels analysts - going out to 2025, and you can see them free on our platform here.
Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are downgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
