Why Did New Fortress Energy Inc. (NFE) Soar 12.56% Despite Financial Woes?

New Fortress Energy Inc. (NASDAQ:NFE) has seen a significant rise of 12.56% in pre-market trading on June 20, 2025, marking a notable shift in investor sentiment.

New Fortress Energy is currently facing a series of financial and operational challenges that have raised concerns among investors. The company's Q1 2025 results showed a significant decline in profitability, with net losses surging to $197 million compared to a $57 million profit in the same period last year. Adjusted EBITDA also plummeted to $82 million, down from $340 million in Q1 2024. This deterioration is largely due to the termination of a Puerto Rico power contract and the sale of emergency assets, which provided a one-time cash boost but did not address deeper structural issues.

The company's debt situation remains precarious, with total liabilities standing at $11.1 billion as of March 2025. A significant portion of this debt, $1.47 billion, is due within one year, including portions of its revolving credit facility. The debt-to-equity ratio of 5.06x is far above industry norms, raising questions about the company's ability to refinance its 2026 maturities. Despite having $827 million in cash, the company's refinancing efforts hinge on risky assumptions, including successful project completions and regulatory approvals.

New Fortress Energy's flagship Louisiana FLNG project has faced regulatory delays, permitting hurdles, and cost overruns, pushing its completion into uncertainty. The project, designed to convert stranded natural gas into liquefied fuel, was projected to generate $2.8 billion annually but remains stuck in bureaucratic quicksand. Additionally, the company's CELBA power plant in Brazil, which is 95% complete but awaiting permits, and the PortoCem project, at 50% completion, add to the liquidity squeeze. These delays mean delayed cash flows, compounding the debt crisis.

The company's operational chaos has spilled into governance, with missed SEC filing deadlines and a Nasdaq notice of non-compliance. The delayed Form 10-Q filing triggered a Nasdaq notice, giving NFE until November 2025 to file or risk delisting. This delay reflects systemic mismanagement and has contributed to a 73% decline in the company's stock over 12 months. Analysts maintain a “Hold” rating with a $15 price target, far below its current price, underscoring the lack of upside momentum.

New Fortress Energy's debt refinancing efforts are equally concerning. A $2.6 billion Term Support Agreement (TSA) aims to extend maturities to 2029, but this is a stopgap solution. Creditors are tightening terms, and S&P downgraded NFE's credit rating to “B-” due to its elevated leverage. Covenant compliance risks loom large, as the company must maintain liquidity thresholds and debt ratios under its revolving credit facility—a near-impossible task without further asset sales or project successes.