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Northland Power (OTC) (TSE:NPI)
:NPI
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Northland Power
(OTC:NPI)
73Outperform
Positive Factors
Financial Performance
The gross 2.4GW of construction projects are expected to add substantial EBITDA, underpinning a projected 7-10% EBITDA CAGR through 2027.
Growth Opportunity
NPI is uniquely positioned to capitalize on the significant growth expected in the offshore wind market.
Negative Factors
Earnings Estimate
Lower offshore wind speeds and curtailments at the German offshore wind facilities have led to reduced 4Q estimates.
Earnings Report
NPI reported Q3/24 adjusted EBITDA below expectations, primarily due to issues in Offshore Wind and Natural Gas performance.
Northland Power (NPI) vs. S&P 500 (SPY)
Market Cap
C$5.10B
Dividend Yield6.16%
Average Volume (3M)1.13M
Price to Earnings (P/E)18.9
Beta (1Y)0.90
Revenue Growth5.08%
EPS GrowthN/A
CountryCA
Employees1,339
SectorUtilities
Sector Strength93
IndustryRenewable Utilities
Share Statistics
EPS (TTM)1.03
Shares Outstanding261,000,120
10 Day Avg. Volume1,055,707
30 Day Avg. Volume1,131,503
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.21
Price to Cash Flow (P/CF)1.60
P/FCF Ratio1.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$27.72Price Target Upside49.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Northland Power Business Overview & Revenue Model
Company DescriptionNorthland Power Inc., an independent power producer, develops, builds, owns, and operates clean and green power projects in North America, Europe, Latin America, and Asia. The company produces electricity from renewable resources, such as wind, solar, or hydropower, as well as clean-burning natural gas and biomass for sale under power purchase agreements and other revenue arrangements. It owned or had an economic interest in 3.2 gigawatts of operating generating capacity. The company was founded in 1987 and is headquartered in Toronto, Canada.
How the Company Makes MoneyNorthland Power generates revenue through the production and sale of electricity from its diverse portfolio of energy assets, primarily focusing on renewable sources such as wind and solar, alongside natural gas facilities. The company enters into long-term power purchase agreements (PPAs) with utilities and other large energy consumers to ensure stable and predictable cash flows. These agreements often include fixed pricing structures that provide revenue certainty over extended periods. Additionally, Northland Power benefits from government incentives and subsidies designed to encourage renewable energy production, further enhancing its financial performance. Strategic partnerships and joint ventures in key markets also play a crucial role in expanding its project portfolio and driving revenue growth.
Northland Power Financial Statement Overview
Summary
Overall, Northland Power showcases a strong financial position with consistent revenue growth and improved profitability. While high leverage is a concern, the company effectively manages its cash flows, supporting its operations and growth initiatives.Income Statement
Northland Power demonstrates solid revenue growth with a 5.1% increase from 2023 to 2024 and a recovery in net income from a loss in 2023 to a profit in 2024. The gross profit margin remains strong, indicating efficient cost management. However, the net profit margin is relatively low at 11.6% due to high interest and tax expenses, suggesting room for profitability improvements.75
Positive
Balance Sheet
The balance sheet shows a relatively high debt-to-equity ratio of 1.72, indicating significant leverage, which could pose risks if not managed well. However, the company has maintained solid equity growth over the years, and the equity ratio of 30.8% suggests a reasonable proportion of assets financed by shareholders' equity. The return on equity improved to 6.5% in 2024, which is a positive sign.70
Positive
Cash Flow
Northland Power's cash flow statement reflects a robust operating cash flow, which increased significantly from 2023 to 2024. The free cash flow growth of 38.9% is impressive, indicating effective capital expenditure management. The operating cash flow to net income ratio is high, showing strong cash generation relative to reported profits.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 2.35B | 2.23B | 2.45B | 2.09B | 2.06B | Gross Profit |
| 2.35B | 1.61B | 2.18B | 1.88B | 1.86B | EBIT |
| 812.89M | 741.16M | 1.05B | 808.65M | 900.21M | EBITDA |
| 1.59B | 1.26B | 2.22B | 1.41B | 1.54B | Net Income Common Stockholders |
| 271.82M | -175.19M | 827.73M | 269.88M | 381.08M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 613.32M | 813.50M | 1.30B | 673.69M | 434.99M | Total Assets |
| 13.60B | 13.63B | 14.22B | 12.88B | 11.40B | Total Debt |
| 7.20B | 7.20B | 7.17B | 7.63B | 7.59B | Net Debt |
| 6.59B | 6.55B | 5.87B | 6.96B | 7.15B | Total Liabilities |
| 9.05B | 9.14B | 9.50B | 9.91B | 9.40B | Stockholders Equity |
| 4.19B | 4.19B | 4.39B | 2.76B | 1.58B |
| Cash Flow | Free Cash Flow | |||
| 476.75M | 343.05M | 1.31B | 1.14B | 1.10B | Operating Cash Flow |
| 1.03B | 785.21M | 1.83B | 1.61B | 1.32B | Investing Cash Flow |
| -448.81M | -1.17B | -629.68M | -1.03B | -839.27M | Financing Cash Flow |
| -720.25M | -262.04M | -604.84M | -225.68M | -389.53M |
Northland Power Technical Analysis
Neutral
18.56
Price Trends
18.32
Positive
18.49
Positive
20.08
Negative
Market Momentum
0.39
Positive
57.34
Neutral
38.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:NPI, the sentiment is Neutral. The current price of 18.56 is below the 20-day moving average (MA) of 19.53, above the 50-day MA of 18.32, and below the 200-day MA of 20.08, indicating a neutral trend. The MACD of 0.39 indicates Positive momentum. The RSI at 57.34 is Neutral, neither overbought nor oversold. The STOCH value of 38.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:NPI.
Northland Power Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | C$5.10B | 18.92 | 6.48% | 6.16% | 5.08% | ― | |
70 Outperform | C$2.75B | 266.67 | 1.44% | 2.66% | 2.60% | ― | |
69 Neutral | C$6.53B | 9.09 | 18.00% | 5.48% | -26.31% | -14.85% | |
65 Neutral | $12.17B | 16.15 | 5.32% | 4.37% | 5.50% | -9.06% | |
64 Neutral | C$2.85B | 79.10 | 2.23% | 2.38% | -16.54% | -53.85% |
* Utilities Sector Average
Performance Comparison
TSE:NPI
Northland Power
18.56
-2.48
-11.77%
TAC
TransAlta
8.16
1.94
31.19%
TSE:BLX
Boralex Inc Cl A
25.93
-0.82
-3.07%
TSE:CPX
Capital Power
44.30
9.13
25.96%
TSE:INE
Innergex Renewable Energy
13.45
5.63
71.99%
AQN
Algonquin Power & Utilities
4.85
-0.99
-16.95%
Northland Power Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -1.40% | Next Earnings Date: May 7, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Northland Power's strong financial position and progress in major projects, indicating a positive outlook for future growth. While there are some challenges such as a decrease in quarterly adjusted EBITDA and potential tariff impacts, the company's strategic partnerships and diversified portfolio position it well to capitalize on energy demand trends.Highlights
Strong Financial Position
Northland Power reported over CAD2.3 billion in revenues and available liquidity of over CAD1 billion, maintaining an investment-grade balance sheet.
High-End Financial Guidance Achieved
Northland Power achieved the high end of its financial guidance for 2024, with adjusted EBITDA reaching CAD1.3 billion, a 2% increase compared to the previous year.
Progress on Major Projects
Significant advancements were made on three large construction projects: Hai Long, Baltic Power offshore wind projects, and Oneida battery storage project, totaling CAD16 billion in investment and 2.4 gigawatts.
Positive Outlook for 2025
Northland Power expects 2025 adjusted EBITDA to be in the range of CAD1.3 to CAD1.4 billion, driven by growth projects under construction, including Hai Long and Oneida.
Strong Partnerships Established
Northland Power has developed strong relationships with global partners like ORLEN, Mitsui, Gentari, ESB, and others, enhancing their project execution capabilities.
Lowlights
Decrease in Quarterly Adjusted EBITDA
Q4 2024 adjusted EBITDA was CAD312 million, a decrease from the previous year, largely attributed to a one-off gain recognized from the Hai Long partnership in 2023.
Challenges in Offshore Wind Resource
The offshore wind resource was lower than the historical high experienced in Q4 2023, impacting revenue generation.
Tariff and Regulatory Concerns
Potential U.S. tariffs could impact future operations, although current diversification mitigates immediate risk. Regulatory processes remain a hurdle in various jurisdictions.
Company Guidance
During the Northland Power conference call discussing the fourth quarter 2024 results, the company provided key financial metrics and guidance for 2025. Northland Power reported adjusted EBITDA of CAD 312 million for Q4, with a full-year adjusted EBITDA of CAD 1.3 billion, representing a 2% increase from the previous year. The company achieved the higher end of its 2024 financial guidance. For 2025, Northland Power projects adjusted EBITDA between CAD 1.3 and CAD 1.4 billion, driven by contributions from projects like Hai Long and Oneida. The guidance anticipates adjusted free cash flow per share to be CAD 1.30 to CAD 1.50, with free cash flow expected between CAD 1.10 and CAD 1.30 per share. The company highlighted its robust liquidity position with over CAD 1 billion available and announced a change in its Dividend Reinvestment Program (DRIP) to reduce shareholder dilution. Northland Power is also progressing on its CAD 16 billion investments in three major projects, which are expected to generate approximately CAD 600 million in adjusted EBITDA and CAD 200 million in free cash flow annually upon completion.Northland Power Corporate Events
Business Operations and StrategyFinancial Disclosures
Northland Power Reports Strong Q4 2024 Results and Outlines 2025 Outlook
Positive
Feb 27, 2025
Northland Power reported strong financial results for the fourth quarter of 2024, achieving the high end of its financial guidance. The company continues to advance its major construction projects, including Baltic Power, Hai Long, and Oneida, and has completed an upgrade to the Thorold natural gas facility. With a robust balance sheet and significant liquidity, Northland Power is well-positioned for growth. The company has issued its 2025 financial outlook, anticipating an increase in Adjusted EBITDA and changes to its Dividend Reinvestment Plan.
Financial Disclosures
Northland Power to Unveil Q4 2024 Financial Results and Host Investor Call
Neutral
Jan 27, 2025
Northland Power announced it will release its fourth quarter 2024 financial results on February 26, 2025, with an investor conference call scheduled for February 27, 2025. This announcement underscores Northland’s commitment to transparency and engagement with stakeholders, potentially influencing investor confidence and market perceptions of the company’s performance and strategic direction in the renewable energy industry.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.