ZACKSยท2025-05-30 14:26Industry Overview - The Zacks Alternative Energy industry is divided into two main groups: one focuses on the generation and distribution of alternative energy sources, while the other is involved in the development and installation of renewable projects [2] - Global spending on clean energy reached a record $2.08 trillion in 2024, with expectations for similar or increased investments in the coming years, indicating solid growth opportunities for industry participants [2] Trends Impacting the Industry - Wind energy is a key growth catalyst, with 1,327 megawatts (MW) of land-based wind installed in Q1 2025 and a projected 4.5% year-over-year increase in wind generation in the U.S. for 2025 [3] - The U.S. electric vehicle (EV) market is expected to grow at a compound annual growth rate (CAGR) of 12.6% from 2025 to 2029, reaching a projected market volume of $154.2 billion by 2029, which will positively impact clean energy companies [4] Challenges Facing the Industry - Rising raw material costs and enhanced import tariffs imposed by the U.S. government are creating headwinds for the alternative energy sector, with $8 billion in clean energy projects canceled in Q1 2025 due to these pressures [5][6] - The Zacks Alternative Energy industry currently holds a Zacks Industry Rank of 143, placing it in the bottom 42% of over 250 Zacks industries, indicating a negative earnings outlook [7][8] Performance Metrics - The Alternative Energy Industry has outperformed both its sector and the Zacks S&P 500 composite over the past year, with a collective stock surge of 41.9% compared to a 9.8% decline in the Oils-Energy sector [10] - The industry is currently trading at a trailing 12-month EV/EBITDA ratio of 21.48, significantly higher than the S&P 500's 16.65 and the sector's 4.59 [12] Company Highlights - Ormat Technologies: Engaged in geothermal energy, announced a $62 million partnership to support energy storage and solar projects, with a projected 8.4% sales improvement for 2025 [15][16] - Standard Lithium: Focused on lithium extraction, secured regulatory approval for a 2.5% lithium royalty, enhancing its pathway to commercial production by 2028 [18][19][20] - Bloom Energy: Generated $326 million in Q1 2025 revenues, reflecting a 38.6% year-over-year increase, with a long-term earnings growth rate of 24.4% [21][22]