Market Sentiment Around Loss-Making Greenlane Renewables Inc. (TSE:GRN)

·3 min read

With the business potentially at an important milestone, we thought we'd take a closer look at Greenlane Renewables Inc.'s (TSE:GRN) future prospects. Greenlane Renewables Inc. designs, develops, sells, and services a range of biogas upgrading systems worldwide. The CA$213m market-cap company’s loss lessened since it announced a CA$2.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$1.7m, as it approaches breakeven. Many investors are wondering about the rate at which Greenlane Renewables will turn a profit, with the big question being “when will the company breakeven?” Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Greenlane Renewables

Greenlane Renewables is bordering on breakeven, according to the 10 Canadian Oil and Gas analysts. They expect the company to post a final loss in 2021, before turning a profit of CA$2.4m in 2022. The company is therefore projected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2022? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

Underlying developments driving Greenlane Renewables' growth isn’t the focus of this broad overview, but, bear in mind that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means, large upcoming growth rates are not abnormal as the company is beginning to reap the benefits of earlier investments.

Before we wrap up, there’s one aspect worth mentioning. Greenlane Renewables currently has no debt on its balance sheet, which is rare for a loss-making oil and gas company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are key fundamentals of Greenlane Renewables which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Greenlane Renewables, take a look at Greenlane Renewables' company page on Simply Wall St. We've also put together a list of pertinent factors you should further research:

  1. Valuation: What is Greenlane Renewables worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Greenlane Renewables is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Greenlane Renewables’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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