What happened
At the market's closing last week, Clean Energy Fuels (CLNE +0.73%) stock was up 7.9% so far this year. The renewable energy stock, however, gave back all of those gains and then some this week alone -- it's down 18.7% this week as of 9:45 a.m. ET Friday, according to data provided by S&P Global Market Intelligence. The stock is now barely 14% away from its 52-week low of $4.02 per share.
Clean Energy Fuels released its fourth-quarter earnings this week, and the company failed to turn a profit yet again.
NASDAQ: CLNE
Key Data Points
So what
Clean Energy Fuels is a leading renewable natural gas (RNG) player in the U.S. It produces RNG from dairy farms in partnership with a couple of energy giants and distributes it through its wide network of stations in the U.S. and Canada for use as a transportation fuel.
With the company reporting a loss of $0.01 per share in the fourth quarter of 2021, the market expected Clean Energy Fuels to turn a profit in Q4 2022.
Clean Energy Fuels, however, reported a bigger loss of $0.06 per share last quarter despite growing its RNG deliveries and revenue by 21% and 24%, respectively, year over year. Aside from higher natural gas prices and lower environmental credits, management blamed several nonoperating expenses for the big loss, including higher stock compensation, depreciation, and debt costs.
Now what
Clean Energy Fuels might expect its RNG sales volumes to more than double by 2026, but investors have no patience left to look for signs that the business will ever become commercially viable.
Clean Energy Fuels has not only dashed investors' hopes of turning profitable this year, but it actually expects to suffer bigger losses in 2023 -- it is guiding for a net loss of between $105 million and $115 million for the year.
Clean Energy Fuels is primarily targeting the heavy-duty trucking market right now, where adoption of RNG has been slower than the company's own expectations. It's also a highly competitive market because the transportation sector has plenty of alternative fuel options, ranging from biodiesel to electric to hydrogen fuel, to choose from.
To top that, dairy farm projects and livestock waste produce low volumes of RNG as of now and rely heavily on environmental credits to make money. Credit prices have been very volatile lately.
These are just some of the reasons investors are dialing back their expectations for Clean Energy Fuels stock this week.
