NFE Intrinsic Value – New Fortress Energy’s Stock Price Drops 33%, Optimizing Portfolio and Improving Operating Margins Despite $56 Million Net Income in 3Q 2022.
February 21, 2023
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New Fortress Energy ($NASDAQ:NFE), a leading global energy infrastructure company, has seen its stock price plummet 33% over the past six months. This drop has made the stock more appealing to investors, as it offers the chance for great returns at a lower entry point, compared to earlier in the year. NFE has worked to optimize their portfolio and improve their operating margins, both of which have resulted in positive financial returns. In the third quarter of 2022, NFE reported a net income of $56 million; this is a considerable improvement over their net loss of $178 million in the second quarter of 2022. This has been due to better expense control and more efficient operations, both of which have come from their continued portfolio and operational optimization.
The firm’s focus on value-driven strategies has paid off, with more employees and customers now taking advantage of their products and services. NFE is confident that their strategies are working and that they can continue to turn their losses around and become more profitable in the future. With the stock at a much lower price now than before, investors have the opportunity to get in on a chance for a higher return. As long as NFE continues to drive efficiency, reinvest in quality services, and expand into new markets, investors have the potential to see an increase in share price.
Share Price
Investors of New Fortress Energy (NFE) were dealt a surprise on Wednesday when their stock price dropped 33%, closing at $39.5. Despite this significant drop, the company had a net income of $56 million in the third quarter of 2022 and has been getting mostly positive media exposure. This drop has left many investors perplexed and posed the question of what the future holds for NFE. In an effort to optimize their portfolios and improve operating margins, NFE is taking a close look at their financial strategies.
Analysts suggest that the company could potentially benefit from expanding into other markets, as well as mitigating debt levels. While the stock price has gone down, analysts are still optimistic about NFE’s future. On Wednesday, the closing price was just 0.3% lower than the previous closing price of $40.1. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for NFE. More…
| Total Revenues | Net Income | Net Margin |
| 2.47k | 281.21 | 13.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for NFE. More…
| Operations | Investing | Financing |
| 315.56 | -438.36 | 192.5 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for NFE. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 7.44k | 5.44k | 8.85 |
Key Ratios Snapshot
Some of the financial key ratios for NFE are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 154.0% | – | 13.9% |
| FCF Margin | ROE | ROA |
| -28.8% | 11.5% | 2.9% |
Analysis – NFE Intrinsic Value
At GoodWhale, we have analyzed NEW FORTRESS ENERGY’s financials and used our proprietary Valuation Line to calculate the intrinsic value of a NEW FORTRESS ENERGY share to be around $88.2. Currently, NEW FORTRESS ENERGY is trading at $40.0, which presents an undervaluation of 54.7%. This means investors are able to purchase shares in NEW FORTRESS ENERGY at a discounted rate which might provide a good opportunity for future returns. More…
Peers
Its competitors are Osaka Gas Co Ltd, Atmos Energy Corp, and Bestsun Energy Co Ltd.
– Osaka Gas Co Ltd ($TSE:9532)
Osaka Gas Co Ltd is a Japanese company that provides natural gas and related services. The company has a market cap of 904.03B as of 2022 and a Return on Equity of 4.85%. The company is involved in the exploration, production, and distribution of natural gas. It also owns and operates a gas pipeline network. The company serves residential, commercial, and industrial customers in Japan.
– Atmos Energy Corp ($NYSE:ATO)
Atmos Energy Corporation is a publicly traded natural gas company headquartered in Dallas, Texas, and is the largest natural-gas-only distributor in the United States, serving over three million customers in eight states. The company supplies gas to residential, commercial and industrial customers through its utilities. Atmos Energy’s primary business is the regulated natural gas distribution business, which it conducts through its subsidiaries in eight states.
– Bestsun Energy Co Ltd ($SHSE:600681)
Bestsun Energy Co Ltd is a solar energy company with a market cap of 5.94B as of 2022. The company has a Return on Equity of 11.71%. The company specializes in the design, manufacture, and sale of solar photovoltaic products.
Summary
New Fortress Energy’s stock price has recently dropped by 33%, despite their 3Q 2022 financial report showing a net income of $56 million.
However, the company is taking steps to optimize their portfolio and improve their operating margins. So far, media exposure has been largely positive, indicating that New Fortress Energy might be able to turn the situation around in the future. Investors should monitor the company’s progress with regards to improving its portfolio and optimizing its operations in order to discern if this could be a good investment opportunity. It is important to note that investing in any company carries some risk and investors should do research on the company before investing.
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