Why Clean Energy Fuels Is a Good Buy

Clean Energy Fuels (CLNE) announced second quarter ended June 30, 2016 total revenue of $108.0 million, up 24 percent year-over-year from $86.9 million during the same period last year.

Clean Energy declared second quarter of 2016 adjusted net income of $3.6 million or $0.03 of non-GAAP income per share compared to non-GAAP net loss of $26.8 million or $0.29 of non-GAAP loss per share in second quarter of 2015.

The global energy company reported satisfactory top line growth primarily driven by positive VETC revenue contribution coupled with impressive company offerings of renewable natural gas as vehicle fuel and favorable development activities of customer stations.

A closer look  

The total number of refuse trucks sold industry-wide have remained the same at 8000 since 2011.
However, Clean Energy has continued to grow the percentage of natural gas trucks since 2008 and maintaining the percentage adoption of these trucks at 60% since 2013. Internationally, over 25 billion gallons of fuel was used per year by heavy duty trucks followed by 2 billion gallons each used by airport vehicles and refuse trucks and 1.5 billion gallons used by transit buses.

Clean Energy currently has a strong fleet of key customers fueling natural gas at its stations including, FedEx, Waste Management, Republic Services and several others.
Why Clean Energy Fuels Is a Good Buy
Image by stux / Pixabay
The expanding fleet of customers using Clean Energy Fueling services is primarily driven by several benefits about using natural gas such as cleaner fuel reducing carbon footprint and minimizing NOx emissions, safe fuel, vast domestic usage, sharp competitive edge, cheaper compared to other fuels and provides lower maintenance expense for the vehicles. Further, there are extremely well-diversified natural gas shale plays across the US that provides a solid source of natural gas for the company.

The ever-increasing demand for natural gas as a fuel considering significant benefits of using the comparatively cleaner fuel, rising adoption of refuse trucks powered by the fuel and an abundant supply of natural gas across the US indicate notable long-term growth prospects for the company while delivering attractive shareholder returns.

A strong network  

Clean Energy is believed to be the largest substitute transport fuel supplier serving over 980 fleet of global customers, fueling more than 44,000 NGVs daily and having over 570 natural gas fueling stations worldwide. In addition, the company is expected to be the lone natural gas fueling services provider industry-wide to offer RNG, LNG and CNG fueling.

Clean Energy has a highly diversified suite of in-house services including, facilities modification, engineering & construction, renewable fuels, grants & financing, station technology & construction, compressors & equipment, CNG, LNG & RNG fueling services and 24/7 service & support. Going forward, Clean Energy is expected to have a strong global network with well-diversified presence at key private & public locations.

There’s consistently and globally expanding natural gas fuel market with Clean Energy providing fleet services to customers at 39 key airports, more than 25% of transit buses operating on the fuel, more than 55% of recently launched refuse trucks are powered by natural gas, there’s rapid transition of heavy-duty truck market with about 6% of the mentioned market equaling the complete refuse market, accelerated usage of LNG locomotives in the rail industry and virtual pipeline CNG offering to major institutional and industrial energy users.

The strong global network of highly diversified fueling services is believed to drive sustainable long-term company growth while allowing it to offer attractive shareholder returns.


Overall, the investors are advised to “Hold” their position in Clean Energy Fuels Corp. considering the company’s significant long-term growth prospects but currently weaker financial position with significant total debt of $524.49 million against weaker total cash position of $162.93 million only, restricting the company to make future growth investments. The profit margin of -25.43% signifies no profit but loss. The PEG ratio of -0.41 also appears misguiding and depicts no growth but decline.
Published on Aug 19, 2016
By Vinay Singh

Copyrighted 2020. Content published with author's permission.

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