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Here's Why Clearway Energy (CWEN) Fell More Than Broader Market

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Clearway Energy (CWEN - Free Report) closed the most recent trading day at $28.07, moving -1.92% from the previous trading session. The stock's performance was behind the S&P 500's daily loss of 0.13%. At the same time, the Dow lost 0.27%, and the tech-heavy Nasdaq lost 0.07%.

Heading into today, shares of the company created by NRG Energy to acquire and operate natural gas, solar and wind plants had lost 4.28% over the past month, lagging the Oils-Energy sector's gain of 2.71% and the S&P 500's gain of 2.71%.

Market participants will be closely following the financial results of Clearway Energy in its upcoming release. The company's earnings per share (EPS) are projected to be $0.53, reflecting a 70.97% increase from the same quarter last year. Our most recent consensus estimate is calling for quarterly revenue of $443 million, down 8.85% from the year-ago period.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $0.8 per share and a revenue of $1.44 billion, indicating changes of +6.67% and +4.88%, respectively, from the former year.

Investors should also take note of any recent adjustments to analyst estimates for Clearway Energy. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the business and profitability.

Our research suggests that these changes in estimates have a direct relationship with upcoming stock price performance. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 9.1% downward. Currently, Clearway Energy is carrying a Zacks Rank of #3 (Hold).

In the context of valuation, Clearway Energy is at present trading with a Forward P/E ratio of 35.82. This denotes a premium relative to the industry average Forward P/E of 20.02.

One should further note that CWEN currently holds a PEG ratio of 1.15. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. CWEN's industry had an average PEG ratio of 2.43 as of yesterday's close.

The Alternative Energy - Other industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 182, finds itself in the bottom 27% echelons of all 250+ industries.

The Zacks Industry Rank evaluates the power of our distinct industry groups by determining the average Zacks Rank of the individual stocks forming the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.


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