Back to top

Image: Bigstock

What's in Store for Renewable Energy Group (REGI) Q3 Earnings?

Read MoreHide Full Article

Renewable Energy Group, Inc. is set to report third-quarter 2020 financial results on Nov 5, after market close. In the last reported quarter, the company delivered an earnings surprise of 105.71%.

In the trailing four quarters, Renewable Energy Group came up with a massive earnings surprise of 1,482.01 %, on average.

Let's take a closer look at the factors influencing the company’s upcoming quarterly results.

Factors Under Consideration

Per the company’s earlier projection, made during the second-quarter earnings call, its renewable diesel and biodiesel demand is likely to have been robust in the third quarter. However, low jet fuel demand is likely to have continued and pushed up diesel costs, resulting in ongoing over supply. The demand for cooking oil is also likely to have been on the lower end than usual, primarily due to the ongoing restaurant closures.

Notably, this may have negatively impacted the company’s soon-to-be-reported quarter’s top-line performance. Currently, the Zacks Consensus Estimate for third-quarter revenues, pegged at $547.4 million, indicates a 6.3% decline from the year-ago quarter’s tally.

Renewable Energy Group’s overall margins are expected to have improved in the third quarter, driven by its consistent efforts in developing the downstream business. This, in turn, might have boosted its quarterly earnings.

In July, Renewable Energy Group partnered with leading petroleum products distributor, Hunt & Sons, to supply and sell branded REG Ultra Clean select Hunt & Sons hardlocks. This is expected to be instrumental in driving demand and expanding margins for both its biodiesel and renewable diesel by selling these to the end users. Notably, such developments are likely to have favorably impacted its third-quarter bottom-line performance.

The Zacks Consensus Estimate for third-quarter earnings per share is pegged at 68 cents against the year-ago quarter’s loss per share of 7 cents.

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Renewable Energy Group this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But this is not the case here.

Earnings ESP: Renewable Energy Group has an Earnings ESP of -15.21%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Renewable Energy Group, Inc. Price and EPS Surprise

Stocks to Consider

Investors can also consider the following players from the same sector that have the right combination of elements to post an earnings beat this season.

Pacific Ethanol is expected to release third-quarter 2020 results soon. It has an Earnings ESP of +35.00% and a Zacks Rank #2.

Comstock Resources (CRK - Free Report) is set to release third-quarter 2020 results on Nov 4. It has an Earnings ESP of +11.11% and a Zacks Rank #3.

Earthstone Energy is set to release third-quarter 2020 results on Nov 5. It has an Earnings ESP of +12.50% and a Zacks Rank #3.

Legal Marijuana: An Investor’s Dream

Imagine getting in early on a young industry primed to skyrocket from $17.7 billion in 2019 to an expected $73.6 billion by 2027.

Although marijuana stocks did better as the pandemic took hold than the market as a whole, they’ve been pushed down. This is exactly the right time to get in on selected strong companies at a fraction of their value before COVID struck. Zacks’ Special Report, Marijuana Moneymakers, reveals 10 exciting tickers for urgent consideration.

Download Marijuana Moneymakers FREE >>


Unique Zacks Analysis of Your Chosen Ticker


Pick one free report - opportunity may be withdrawn at any time


Comstock Resources, Inc. (CRK) - $25 value - yours FREE >>

Published in