2. Clean Energy Fuels Corp. (NASDAQ:CLNE)
Number of Hedge Fund Investors in Q1 2024: 20
Average Analyst Share Price Target Upside: 167.04%
Average Analyst Share Price Target: $7.13
Clean Energy Fuels Corp. (NASDAQ:CLNE) is a new energy company that provides natural gas for commercial transportation as well as renewable natural gas. It is one of the earliest movers in its industry, which allows Clean Energy Fuels Corp. (NASDAQ:CLNE) a considerable competitive moat at its advantage. However, at the same time, its performance is also contingent on the broader market use of natural gas for transportation and commercial vehicles. Therefore, Clean Energy Fuels Corp. (NASDAQ:CLNE) has to carefully balance its production capacity with the demand, and any mismatches could lead to either costly excess capacity or under capacity that leads to new market entrants. Additionally, its industry also requires Clean Energy Fuels Corp. (NASDAQ:CLNE) to invest heavily to create the market for its industries. This leads to debt, which pushed FCF to negative in 2023. Clean Energy Fuels Corp. (NASDAQ:CLNE) hasn’t generated a profit in its last four fiscal years either.
Clean Energy Fuels Corp. (NASDAQ:CLNE)’s management is optimistic for its market though, as it commented during the Q1 2024 earnings call:
“It pleases me to say that we kicked off 2024 with a strong first quarter. Our base business of fueling fleets, constructing and maintaining stations for those fleets, and providing other services that keeps trucks, shuttles and buses operating on a clean fuel performed well. We also made good progress in our business of developing renewable natural gas dairy projects. I’ll expand with a few more details on both in a moment. The 8.6% year-over-year growth in RNG fuel volumes is a testament to the stability and growth in our base business. In addition, it reflects the significant RNG volume that is now flowing through the new state-of-the-art fueling stations that we have built and opened over the last two years, where we have an anchor customer in Amazon.
We are also seeing other vehicles begin to fuel at these stations, which helps our fuel margins. As always Bob will give you more details about our financial results, but I would be remiss in not calling out the $12.8 million in adjusted EBITDA for Q1 compared to minus $4 million of Q1 of last year. The significant upswing is attributed to the growth in our core business that I just mentioned, as well as circumstances which we found ourselves during the beginning of last year with historically high natural gas prices in California that impacted our bottom line. Our balance sheet remains strong with almost $250 million of cash and investments on hand. And you should see continued, improved adjusted EBITDA results through this year. I’d like to take a moment to address the environmental credit situation because I think some might tie the ups and downs of those prices a little too tightly to our overall business.”
