New Fortress Energy Q3 Earnings: Buying Soaring NasdaqGS:NFE Stock Before Call?

in EARNINGS/INVESTING IDEAS by

New Fortress Energy Inc. (NasdaqGS:NFE) is scheduled to report Q3 earnings results on October 29, 2020.

The company is expected to report earnings of $0.10/share on revenue of $145.6 million. The consensus earnings per share (EPS) of $0.10/share is based on a poll of 7 analysts and represents a growth in eps of 132.8% over the same quarter last year, when the company reported earnings of -$0.30/share.

The revenue forecast of $145.6 million based on a poll of 7 analysts implies a year-over-year (YoY) growth in revenue of 193.2%. Last year the company reported $49.656 million in revenue for the quarter.

Expected to report EPS of $0.10/share for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $145.57 $49.66 193.2%
EPS $0.10 -$0.30 132.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 2 out of the last 7 tracked quarters, and missed expectations 5 quarters.

What are your expectations from New Fortress Energy Inc. for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 -$0.17 -$0.24 -36.2% Missed
Q1, 2020 -$0.13 -$0.31 -135.5% Missed
Q4, 2019 -$0.19 -$0.08 55.3% Beat
Q3, 2019 -$0.14 -$0.30 -118.2% Missed
Q2, 2019 -$0.14 -$0.28 -103.6% Missed
Q1, 2019 -$0.20 -$0.08 60.2% Beat
Q4, 2018 -$0.24 -$0.38 -58.9% Missed

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 8.1%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
August 3, 2020 $21.60 $23.36 8.1% Increase
May 5, 2020 $12.60 $12.58 −0.2% Decline
March 4, 2020 $14.07 $15.45 9.8% Increase
November 11, 2019 $16.66 $15.98 −4.1% Decline

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.73, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.73 implies a 0.3% chance of earnings manipulation.

Fundamentals And Technical Analysis

New Fortress Energy Inc. is currently trading at $49.65/share, down −1.9% for the day. The company is trading at approximately 90.4% of its 52-week high of $54.92/share. The company’s stock price is up 112.5% since the last earnings report and down −4.3% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 62.72 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NasdaqGS:NFE Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of −52.42 and a forward P/E multiple of 342.77.

New Fortress Energy Inc.’s current share price also implies a price-to-book (P/B) multiple of 58.57. The following table summarizes some other key fundamental ratios:

Data as of October 27, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $49.65
P/E Ratio −52.4x
P/E Ratio (Fwd) 342.8x
PEG Ratio 1.1
Total Debt / Total Capital 10.8%
Levered Free Cash Flow -$462.6 million
EV / EBITDA −73.3x

Finbox

New Fortress Energy Inc. is a mid-cap stock with a market capitalization of $8.376 billion and a total enterprise value of $9.251 billion. The company operates in the Energy sector and the Oil, Gas & Consumable Fuels industry.

New Fortress Energy Inc. operates as an integrated energy infrastructure company worldwide. It funds, builds, and operates natural gas infrastructure and logistics to deliver integrated turnkey energy solutions that enhance environmental stewardship and transform local industries and communities. The company was founded in 2014 and is based in New York, New York.

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