We’ve been talking about stocks lately that are obviously important in the world of marketplace happenings and trends, with AI being a prime example. The market moves fast, and while others have profited, some of us feel like we can’t find our way in. That’s okay! There are always other options.
Not all of us chase the “next big thing,” but instead try to invest safely, find a comfort zone, and take only calculated risks. Energy is an excellent space for this.
Today, I’m looking at three energy stocks that are down year-to-date, and the below-fair-value pricing leaves plenty of room for price appreciation. These are each in an ideal position to turn a profit.
I’ll now dive into these three energy stocks to expose their profitability. So, let’s check it out:
Vertex Energy Inc (VTNR)
A forward-thinking refining company, Vertex Energy (VTNR) specializes in the production and distribution of a diverse range of fuels, exploring both traditional and alternative sources. VTNR recently wrapped up its ambitious renewable diesel (RD) conversion project, marking a significant milestone for the business.
As a result, revenue soared, showcasing remarkable growth in VTNR’s products and refined treasures during Q1 2023. By embracing sustainable practices, VTNR may be at the forefront of the transition.
VTNR is down slightly year-to-date by 0.48%, has a 1.05 beta score, and shows 187.32% in TTM (trailing twelve-month) asset growth. VTNR’s TTM revenue is $3.4 billion, more than six times higher than its market cap of $517 million. With a PEG (price/earnings/growth) ratio of 0.44x, VTNR, during its last earnings call, reported EPS of $0.68 per share vs. the $0.15 expected, beating analysts’ forecasts by a whopping 341.6%. VTNR shows year-over-year growth in critical areas like revenue (+827.25%), net income (+1,284%), EPS (+950%), and net profit margin (+227.75%). With an operating free cash flow of $105 million and a 10-day average volume of 2.11 million shares, VTNR has a median price target of $11.50, with a high of $15 and a low of $8; this represents the potential for a more than 143% price increase from VTNR’s current position.
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Sunrun Inc (RUN)
Sunrun Inc. (RUN) is a top energy stock with a compelling valuation and, from what I can see, a lot of growth potential. RUN leads the untapped U.S. residential solar energy market, boasting a projected 15.3% annual growth rate until 2030. There have been concerns regarding short-term profitability, but longer-term forecasts are very bright for RUN. This is a great example of one of those “calculated risks” I mentioned in my introduction; don’t forget that there’s a lot of potential here.
RUN’s stock is currently down by 20.02% year-to-date, and there’s an argument to be made for it being undervalued—especially given the forecasts. RUN has TTM asset growth of 14.33% and TTM revenue of $2.42 billion at $0.10 per share. RUN has a P/S (price to sales) ratio of 1.76x and a P/B (price to book) ratio of 0.64x. Although missing on EPS, RUN reported $589.85 million in revenue vs. the $517.78 million projected by Wall Street analysts, surprising by a 13.92% margin and showing revenue growth (year-over-year) of 18.87%. For the current fiscal quarter, RUN is projected to report $621.6 million in sales with quarterly EPS growth of 78.58%. With a 10-day average trading volume of 7.92 million shares, RUN has a median price target of $33.53, with a high of $66 and a low of $25, suggesting a price increase of anywhere from 61% to 212%. Take a look at how RUN’s dip is rising back up.
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Plug Power Inc (PLUG)
With its unique expertise in hydrogen fuel cells, which generate power from hydrogen and oxygen while emitting only water vapor, Plug Power Inc. (PLUG) utilizes them to surpass the reliance on lithium batteries in electric vehicles. For PLUG, supplying EV manufacturers is a little easier, given that there are costly regulations on lithium and its use. Despite any drawbacks, it is considered a leader in the space, and right now, PLUG shows the most potential out of all of its clean energy counterparts for long-term price appreciation… and it’s a substantial difference.
PLUG is down by 23.04% year-to-date and sits near the bottom of its existing 52-week range, showing that it might just be due for a comeback. With a TTM revenue of $770 million, PLUG’s current-quarter revenue is expected to come in at $251.9 million. Until reporting again on August 10th, PLUG could have
done a lot worse with its last earnings call, when it reported revenue of $210.29 million vs. the $207.76 million expected, beating analysts’ forecasts by 1.21%; it also shows year-over-year revenue growth of 49.35%, in addition to net profit margin growth of 11.62%. PLUG has a P/B (price to book) ratio of 1.57x and a refreshing D/E (debt to equity) measure of 15.15%. Showing forward 1-year EPS growth of 48.1% and a 10-day average volume of 26.91 million shares, PLUG has a median price target of $18.54, with a high of $78 and a low of $7.50. This represents a price upside of anywhere from 57% to 719% (as in seven hundred and nineteen) from its current position. Analysts are mostly bullish on PLUG; I can see why.
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