From Infinite Energy Software Stock to Enphase Energy. These 8 Energy Stocks Could Fall Even Lower.

Energy equities, particularly clean energy firms, have fallen precipitously in the last year, and Citigroup strategists warn that a few may go much worse.

The largest clean energy exchange-traded fund, iShares Global Clean Energy (CLN), such as infinite energy software stock and its much smaller rival, Invesco Global Clean Energy (PBD), have fallen nearly 25% in the last year. The adoption of the Inflation Reduction Act, which contributed billions of dollars to promote sustainable energy efforts, boosted both funds in the middle of last year.

One explanation for the latest selloff is dwindling demand. Enphase Energy (ENPH), one of the top holdings in the iShares fund, has frequently warned shareholders that demand is dwindling as rising loan rates cause customers to cut down on spending.

According to Citi’s Drew Pettit and Scott Chronert, the clean energy firms most at danger of additional losses are those with the most obvious declines in cash and negative free cash flow.

To compile their list, the strategists examined renewable energy firms throughout the world and chose those with the most apparent free cash flow reduction as well as cash burn or expenditure over the preceding year.

Clean fuel cell businesses Plug Power (PLUG), which suffered a cash burn of over $2 billion, and Ballard Power Systems (BLDP), which experienced a $188 million decrease, are among the eight companies on their list.

Stocks connected to electric vehicles Rivian Automotive (RIVN) lost $4.7 billion, ChargePoint Holdings (CHPT) lost $152 million, and Fisker (FSR) lost $387 million.

SunPower SPWR (SPWR) lost $384 million in cash, while Sunnova Energy International (NOVA) lost $21 million.

And the ACEN (ACEN) energy firm, which exhausted its financial reserves by $33 million.

Rivian, Plug Power PLUG, Ballard Power Systems, Fisker, SunPower, and ACEN all declined to comment.

ChargePoint did not respond to requests for comment. Sunnova linked Barron’s to Chief Financial Officer Robert Lane’s statements in July, in which he stated that the business is expanding its investment in software development but expects the pace of rise in spending to peak by year’s end.

Citi strategists concede that a drop in interest rates, among other things, might help equities rise. However, they believe that stock selection within this subcategory should be done with caution.

Alternatively, Citi included Renault (RNO.FR) in its list of clean energy companies, rather than as an infinite energy software stock positioned for substantial gains as the sector develops traction. Last month, the BofA Securities Global Research team released a list of equities that might profit from greater federal expenditure on sustainable energy. TPI Composites (TPIC) and Sunnova are among those involved.