While President Donald Trump has expressed a fondness for oil and gas with his “drill, baby, drill” mantra, experts are also keeping a close eye on where he stands on alternative energy sources.
Clean Energy Fuels Corp., a Newport Beach-based supplier of renewable natural gas (RNG) made from organic waste for trucks and buses, is on the front lines amid plenty of uncertainty.
Clean Energy, founded 28 years ago by the legendary T. Boone Pickens and the most valuable OC public company in the renewable energy sector, on Feb. 24 reported fourth-quarter earnings and a 2025 outlook that missed Wall Street expectations.
The stock plunged 25% to $2.02 each in the following trading session (Nasdaq: CLNE). At press time, the shares traded at $2.01 and a $435 million market cap. The shares have been on a rollercoaster, trading as low as $1 in 2019 to more than $17 in 2021.
Analyst Justin Jenkins at Raymond James lowered the price target for the stock to $4 from $5. Yet, Jenkins also sees Clean Energy Fuels as a stock to buy.
“Despite near-term policy uncertainty, we reiterate our Strong Buy rating,” Jenkins wrote.
He noted that the “business is highly sensitive to both federal and state policy incentives,” which include tax credits.
Clean Energy said its Alternative Fuel Tax Credit, which generated $24 million in revenue last year, has expired and it is hopeful it will be renewed.
“Because of its environmental and economic development benefits to both urban and rural areas, RNG already has broad bipartisan support and should be part of every discussion regarding the heavy-duty transportation sector across the U.S. and Canada,” CEO Andrew Littlefair said in a quarterly statement issued on Feb. 24.
Story in the Numbers
The numbers tell the story of a difficult market for alternative fuel sources.
Sales dropped 2.2% to $415.9 million in 2024. The company forecasts 2025 sales of $400 million, implying a 3.6% decrease over 2024. Before the most recent report, analysts expected 2025 revenue of $440 million.
Worse, the company forecasts a deterioration in profit, saying its 2025 adjusted profit outlook will be around $50 million to $55 million, down from $77 million in 2024. The company foresees a GAAP net loss from $155 million to $160 million for this year, almost double that in 2024.
While Trump has railed against wind power and disparaged solar panels, his attitude toward renewable natural gas isn’t as well defined, at least not publicly.
Energy Secretary Chris Wright did not mention renewable natural gas in his welcome remarks to DOE staff on Feb. 5, according to a text posted on the agency’s website.
Clean Energy Fuels executives publicly are taking the positive approach for its renewable natural gas, which is made from organic waste at facilities such as dairy farms.
With “the new administration’s focus on a domestically produced and diversified energy supply, RNG checks all the boxes by being a biofuel made from capturing harmful waste emissions and converting them into a productive transportation fuel,” CEO Littlefair told stock analysts after the earnings release on Feb. 24.
“And RNG just makes common sense, which is what the administration is looking for as they move forward with all their policy initiatives,” Littlefair said.
A RNG Education
Littlefair said the company has “already been active in educating the new administration” about the benefits of domestically produced renewable natural gas (RNG).
Clean Energy Fuels said that in the fourth quarter it closed numerous RNG deals with customers such as DHL, Food Express, LA Metro and Estes Express Lines.
It was also awarded a design and construction contract for a new hydrogen station for Riverside Transit Agency.
The company said it’s optimistic about the adoption of the Cummins X15 engine, which is expected to hit the road later this year and drive significant growth in the heavy-duty trucking sector.
Clean Energy is also looking into hydrogen as a different type of fuel.
