Clean Energy Fuels has been treading water for the past six months, recording a small loss of 1.4% while holding steady at $2.55.

Is now the time to buy Clean Energy Fuels, or should you be careful about including it in your portfolio? Check out our in-depth research report to see what our analysts have to say, it’s free.

Why Do We Think Clean Energy Fuels Will Underperform?

We're swiping left on Clean Energy Fuels for now. Here are three reasons we avoid CLNE and a stock we'd rather own.

1. Long-Term Revenue Growth Disappoints

Cyclical sectors like Energy often flatter weaker operators during favorable price environments, but a longer-term lens separates those from businesses that can consistently perform across market cycles. Over the last five years, Clean Energy Fuels grew its sales at a tepid 7.8% compounded annual growth rate. This fell short of our benchmark for the energy upstream and integrated energy sector.

2. Fewer Distribution Channels Limit its Ceiling

In Energy, scale separates fragile single-asset producers from platform-style businesses that generate revenue across entire basins and infrastructure networks.

Clean Energy Fuels’s $424.8 million of revenue in the last year is pretty small for the industry, suggesting the company hasn’t hit a level of diversification where investors can sleep easy at night.

3. Low Gross Margin Reveals Weak Structural Profitability

While energy gross margins can be distorted by commodity prices, hedging, and short-term cost swings, sustained margins across a full cycle reflect a producer’s underlying asset quality, infrastructure position, and cost structure.

Clean Energy Fuels, which averaged 24.6% gross margin over the last five years, exhibiting bottom-tier unit economics in the sector. It means the company will struggle at higher commodity prices than peers with better gross margins.

Final Judgment

Clean Energy Fuels falls short of our quality standards. That said, the stock currently trades at 8.7× forward EV-to-EBITDA (or $2.55 per share). This multiple tells us a lot of good news is priced in - you can find more timely opportunities elsewhere. We’d suggest looking at a fast-growing restaurant franchise with an A+ ranch dressing sauce.

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