Why Clearway Energy (CWEN) Outpaced the Stock Market Today

Clearway Energy (CWEN) ended the recent trading session at $39.91, demonstrating a +1.58% change from the preceding day's closing price. This change outpaced the S&P 500's 0.72% gain on the day. Elsewhere, the Dow gained 0.48%, while the tech-heavy Nasdaq added 1.16%.

The stock of company created by NRG Energy to acquire and operate natural gas, solar and wind plants has risen by 4.58% in the past month, lagging the Oils-Energy sector's gain of 9.32% and overreaching the S&P 500's loss of 4.99%.

The investment community will be closely monitoring the performance of Clearway Energy in its forthcoming earnings report. The company is expected to report EPS of -$0.29, down 1066.67% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $322.42 million, showing a 8.19% escalation compared to the year-ago quarter.

Looking at the full year, the Zacks Consensus Estimates suggest analysts are expecting earnings of $0.66 per share and revenue of $1.63 billion. These totals would mark changes of -53.85% and +13.81%, respectively, from last year.

Any recent changes to analyst estimates for Clearway Energy should also be noted by investors. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the business outlook.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.87% lower within the past month. Clearway Energy presently features a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that Clearway Energy has a Forward P/E ratio of 59.9 right now. This expresses a premium compared to the average Forward P/E of 18.05 of its industry.

It's also important to note that CWEN currently trades at a PEG ratio of 2.71. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company's projected earnings growth. The average PEG ratio for the Alternative Energy - Other industry stood at 2.31 at the close of the market yesterday.

The Alternative Energy - Other industry is part of the Oils-Energy sector. This industry, currently bearing a Zacks Industry Rank of 81, finds itself in the top 34% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within 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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This article originally published on Zacks Investment Research (zacks.com).

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