Growing concerns over global warming and climate change have compelled governments worldwide to set clearer goals to transition to a clean-energy-based future. And favorable policy support makes the prospects bright for companies that can help achieve climate goals with their products and services.
Clean energy and electric vehicle companies are at the forefront of the world’s shift to a sustainable and eco-friendly future. And as such, they have been attracting significant investor attention. But, while the share-price gains of many of these companies have been backed by their fundamental strength, some players with weak financials have gained solely based on investor optimism over the industry’s potential. So, both strong and weak stocks in this space have been discussed in Reddit chat rooms, such as the well-known r/wallstreetbets.
Clean Energy Fuels Corp. (CLNE) and Workhorse Group, Inc. (WKHS) have been found on the Reddit wallstreetbets dashboard. And we think these stocks are worth watching because Wall Street analysts expect them to rally by more than 20% in the next 12 months.
Clean Energy Fuels Corp. (CLNE)
CLNE provides natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The company builds and operates public and private vehicle fueling stations and sells and services compressors and other equipment used in RNG production. It also helps its customers acquire and finance natural gas vehicles and obtain local, state, and federal clean air rebates and incentives. There have been 307 comments on CLNE in the Reddit chat room and the stock has a sentiment score of 0.128.
On May 11,Chevron U.S.A. Inc., a wholly owned subsidiary of Chevron Corporation (CVX), announced that it would invest an additional $20 million in an Adopt-a-Port initiative with CLNE. Chevron will supply renewable natural gas (RNG) to CLNE stations. CLNE will manage the program, offering fueling services for these truck operators. These measures should help both the companies to reduce smog-forming NOx emissions by up to 98%, compared to diesel trucks, and provide low carbon fuels to the customers.
CLNE signed an agreement with Amazon (AMZN) on April 19 to develop low and negative carbon RNG fuel at CLNE’s existing and new fueling stations that provide RNG in 15 states. In fueling tens of thousands of vehicles across the country every day, both companies hope to find solutions that work both environmentally and economically to tackle climate change.
For its fiscal year 2021 first quarter, ended March 31, the company’s total revenues increased 2.9% sequentially to $264.84 million. Its product revenue is reported at $67.69 million, up 3.3% from the prior quarter. Despite lower fuel volumes within the airports and public transit markets, the company was able to deliver 37 million gallons of RNG during the quarter, which represented a 3% year-over-year improvement. As of March 31, CLNE has cash and cash equivalents of $116.70 million.
Analysts expect CLNE’s revenue to improve 23.3% year-over-year for the current quarter, ending June 30, 2021, to $73.80 million. CLNE’s EPS is expected to grow at a 15% rate of 15% per annum over the next five years. The stock has gained 321.3% over the past year and 262.3% over the past nine months. CLNE closed Friday’s trading session at $9.31.
Of the four Wall Street analysts that have rated the stock, two rated it ‘Buy’ and one rated it ‘Hold.’ Analysts expect the stock to hit $15.33 in the near term, which indicates a 64.7% potential upside.
Workhorse Group, Inc. (WKHS)
WKHS is a technology company that provides sustainable solutions to the commercial transportation sector. The company operates as an original equipment manufacturer and designs and builds battery-electric vehicles including trucks, aircrafts and drone systems. It also develops cloud-based and real-time telematics performance monitoring systems that enable fleet operators to optimize energy and route efficiency. With a sentiment score of 0.111, there have been 69 comments on WKHS on Reddit.
On May 10, WKHS entered into a strategic development agreement with EAVX, a subsidiary of J.B. Poindexter & Co. (JBPCO), a leading provider of commercial vehicle body solutions, to develop next-generation delivery vehicles and expand WKHS’ product line in the last-mile delivery market and create solutions for new customer segments. JBPCO, in collaboration with WKHS, hopes to produce a high-quality electric chassis to be incorporated into work trucks and delivery bodies. Both companies are looking forward to a long-term partnership with each other.
On May 5, WKHS agreed with Coulomb Solutions, Inc. (CSI), the North American distributor of Contemporary Amperex Technology Co., Limited (CATL) commercial vehicle battery systems, to provide battery systems for its best-in-class electric delivery vehicles. Features that include high safety levels, a light weight, and a wide range of off-the-shelf battery systems from 40 to over 600kWh in CSI’s CATL lithium battery systems, will enable WKHS to offer its customers a variety of EV driving ranges and with an excellent battery warranty backed by a global, blue-chip enterprise.
WKHS’ net sales were $521,060 for the first quarter, ended March 31, which represents a 518.1% improvement year-over-year. The increase in sales was related primarily to an increase in trucks delivered. Six trucks were delivered in total during the first quarter of 2021. The company had cash and cash equivalents of $205.07 million as of March 31, 2021.
A $6.41 million consensus revenue estimate for the current quarter, ending June 30, 2021, represents a 6867.4% rise from the prior-year period. The stock has rallied 302.8% over the past year to close Friday’s trading session at $13.05.
Wall Street analysts expect the stock to hit $15.70 in the near term, which indicates a potential upside of 20.3%. Of seven Wall Street analysts, three have rated it ‘Buy’ and four rated it ‘Hold.’
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CLNE shares were trading at $10.33 per share on Monday afternoon, up $1.02 (+10.96%). Year-to-date, CLNE has gained 31.42%, versus a 13.09% rise in the benchmark S&P 500 index during the same period.
About the Author: Sweta Vijayan
Sweta is an investment analyst and journalist with a special interest in finding market inefficiencies. She’s passionate about educating investors, so that they may find success in the stock market. More...
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