Shares of natural gas fuel company Clean Energy Fuels Corp (NASDAQ:CLNE) fell as much as 17.8% in trading Thursday, ending the day down 15.5% as an analyst gave a negative review of the stock. But keep in mind that shares are still up 54.2% year to date, so this has been a winner of late for investors.
Today’s move was driven by Raymond James analyst Pavel Molchanov, who cut his rating from market perform to underperform. Excitement about the equity investment Totalmade in the company earlier this year was cited as a reason shares have surged, but Molchanov thinks shares have gone up too high too fast.
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Shares of Clean Energy Fuels have been very volatile this year, but they’ve been rising on news like the Total investment and rising oil prices. On the flip side, the company has actually been shrinking, and losses have been growing over the past year, so fundamentals haven’t caught up to investor bullishness at the moment.
CLNE Revenue (TTM) data by YCharts.
Intangible news items are really what’s driving Clean Energy Fuels stock lately, and it’s hard to tell if the company is coming or going on any given day. What investors will want to watch over the next year is how Total’s funding and higher oil prices impact demand.
If they lead to more natural gas being used and higher prices at the pump, the company could be well-positioned to reduce losses and eventually make a profit. But if demand doesn’t pick up while conditions are good, the company may not ever live up to expectations. This debate will keep investors on their toes as the year plays out.