Clean Energy (CLNE, Financial) is progressing smoothly by winning key contracts with minor, local haulers all over the country. Clean Energy now works with nearly 250 refuse fleets, depicting more than 9,000 natural gas trucks.
Seeing strong traction
During the fourth quarter of 2014, Clean Energy reported approximately 43% refuse volume growth over the same period last year, and boasts to have approximately 75% market share.
This significant increase in refuse volumes and huge orders for CNG trucks highlights the effective growth strategy of the company, leaving behind its key competitors.
Clean Energy grew its Canadian business significantly during 2014, introducing a key station for BC Transit on Vancouver Island, and it also grabbed a major order to develop a custom-built second station for them.
The growth of major partnerships of Clean Energy with the key state run transport authorities and its major development of the Canadian business in 2014 are estimated to drive significant revenue streams for the energy major and thus improved shareholder returns.
Lately, Clean Energy declared a combined CNG schedule with Agility Fuel Systems which is a major supplier of CNG storage and key delivery systems.
Growth drivers
The energy systems supplier successfully deployed the LNG fleet for Fred Meyer Stores of Kroger in Oregon. It is also continuously supporting the key deployment of the major LNG fleet of UPS in North America by launching its Houston Flying J station particularly crafted for them. At present, Clean Energy fuels more than 200 UPS trucks at about eight stations under its network.
The analysts seem to be unhappy with the overall market conditions although Clean Energy is keen on expanding its operations by partnering strategically with the state’s major fuel suppliers.
Clean Energy just signed a multi-year fueling contract with Dillon Transport Corporation which is forecasted to open three innovative CNG stations of which one is already completed. It started fueling the initial heavy-duty natural gas trucks fleet introduced by Bimbo Bakeries which is the major baker in the United States.
The consensus forecast among 12 polled investment analysts evaluating Clean Energy Fuels Corp suggests investors to hold their position in the company. This consensus estimate is held constant since the investment analyst’s sentiments worsened in March 2012. The earlier consensus estimate suggested that the company should outperform the market.
The investment analysts at Zacks Investment Research suggest the investors to Buy the stock looking at the impressive valuation levels and a significant growth potential, going forward.
TheStreet Ratings team rates Clean Energy Corp. as a Sell with a ratings score of D owing to several weaknesses that are believed to outweigh any of the company’s strengths. Some of the company’s weaknesses include overvaluation of the stock, declining EPS and the overall weaker energy market conditions which should further pull down the stock and make it hard for the investors to achieve profitability.
Conclusion
Overall, the investors are advised to avoid investments into the Clean Energy Corporation looking at the disappointing company valuations. The PEG ratio of -0.24 depicts no growth but decline compared to relatively healthier industry’s average of 3.72. The profit margin of -20.90% indicate no profit but loss. Diluted EPS of -0.96 signifies no earnings but loss. Additionally, the company is hugely debt-laden with total debt of $570.67 million against total cash of $214.93 million only, restricting Clean Energy to plan other significant growth investments.
