Excelerate Energy-4 Alternative Energy Stocks to Buy Amid Rising Raw Materials Cost

Industry Overview - The U.S. electric vehicle market is expected to experience solid growth, driven by the electrification of the transportation sector, which will positively impact alternative energy stocks [1] - The Zacks Alternative Energy industry is divided into two segments: one focuses on the generation and distribution of alternative energy, while the other is involved in the development and installation of renewable projects [2] - Global spending on clean energy technologies is projected to reach $2 trillion in 2024, indicating significant growth opportunities in the clean energy sector [2] Key Trends - Wind energy is a major growth catalyst, contributing approximately 10.2% of total U.S. utility-scale electricity generation in 2023, with a projected 6.6% year-over-year increase in 2024 [3] - The U.S. electric vehicle market saw new registrations of 1.4 million in 2023, reflecting over 40% growth from 2022, with an expected CAGR of 6.6% from 2024 to 2029 [4] Challenges - Rising costs of renewable installations, particularly due to increased steel prices, are posing challenges for clean energy installers [5] - The average price of key minerals in the wind industry has risen by 93% from January 2020 to March 2023, leading to a nearly 50% increase in the levelized cost of electricity for U.S. offshore wind projects from 2021 to 2023 [6] - The strained U.S.-China relationship could impact the green energy supply chain, as China accounts for up to 90% of the refining capacity for rare earth elements essential for green energy products [6] Market Performance - The Zacks Alternative Energy industry has outperformed both its sector and the S&P 500, with a collective stock surge of 55.6% over the past year compared to a 6.3% decline in the Oils-Energy Sector and a 30.2% gain in the S&P 500 [9] Valuation - The industry is currently trading at an EV/EBITDA ratio of 11.05, significantly lower than the S&P 500's 19.01, indicating potential undervaluation [11] Notable Companies - **Excelerate Energy (EE)**: Projected 2025 sales of$ 2.29 billion, reflecting a 16.3% improvement from the previous year, with a long-term earnings growth rate of 11.2% [15] - FuelCell Energy (FCEL): Expected fiscal 2025 sales improvement of 83.7%, with a four-quarter average earnings surprise of 18.75% [18] - TXNM Energy: Anticipated 2024 sales improvement of 11.5%, with a long-term earnings growth rate of 3% [21] - GEVO Inc.: Projected 2025 sales improvement of 101.5%, with a recent earnings surprise of 10% [24]