RE Royalties (RE) AI Stock Analysis

• Market Cap: C$11.71M
• Dividend Yield: 14.81%
• Average Volume (3M): 52.17K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.20
• Revenue Growth: 155.71%
• EPS Growth: -375.75%
• Country: CA
• Employees: 9
• Sector: Utilities
• Sector Strength: 65
• Industry: Financial - Conglomerates
• EPS (TTM): -0.02
• Shares Outstanding: 43,376,804
• 10 Day Avg. Volume: 39,412
• 30 Day Avg. Volume: 52,175
• PEG Ratio: >-0.01
• Price to Book (P/B): 3.58
• Price to Sales (P/S): 2.17
• P/FCF Ratio: -2.13
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 41 Neutral
• Price Target: C$0.23 ▼(-11.92% Downside)

The overall stock score is primarily impacted by the company's poor financial performance, characterized by declining revenues, persistent losses, and high leverage. The technical analysis indicates a bearish trend with oversold conditions, while the valuation reflects negative earnings and a potentially unsustainable dividend yield. These factors collectively suggest significant financial risks and challenges for RE Royalties.

Positive Factors

Business Model Strength

The company's unique royalty-based business model provides a steady income stream from renewable energy projects, aligning with the growing demand for clean energy solutions and offering long-term revenue potential.

Market Position

By investing in a range of projects across North America and other regions, RE Royalties strengthens its market position and mitigates risk, benefiting from the structural trend towards renewable energy adoption.

Revenue Growth

Despite financial challenges, the company has shown significant revenue growth, indicating potential for scaling operations and capturing market opportunities in the renewable energy sector.

Negative Factors

Financial Stability

High leverage and reliance on debt financing pose financial risks, limiting the company's ability to invest in growth and potentially impacting long-term stability.

Profitability Challenges

Persistent losses and negative profit margins highlight operational inefficiencies, challenging the company's ability to achieve sustainable profitability and return value to shareholders.

Cash Flow Management

Cash flow issues relative to earnings indicate difficulties in converting revenue into cash, potentially constraining the company's capacity to fund operations and growth initiatives.

RE Royalties Business Overview & Revenue Model

Company Description

RE Royalties Ltd. engages in the acquisition of revenue-based royalties from renewable energy generation facilities and other clean energy technologies by providing a non-dilutive royalty financing solution to privately held and publicly traded renewable energy generation and development companies, and clean energy technology companies. As of April 25, 2022, it owned a portfolio 104 royalties on solar, wind, hydro, battery storage, and renewable natural gas projects in Canada, Europe, and the United States. The company is headquartered in Vancouver, Canada.

How the Company Makes Money

RE Royalties generates revenue primarily through its innovative royalty agreements, which allow the company to earn a percentage of the revenue generated by the renewable energy projects it finances. This model provides a steady income stream as the projects produce energy and sell it to the grid. Additionally, the company may engage in partnerships with renewable energy developers and operators, further expanding its portfolio and revenue potential. By investing in a range of projects across North America and other regions, RE diversifies its income sources while capitalizing on the growing demand for clean energy solutions.

RE Royalties Financial Statement Overview

Summary

RE Royalties experiences robust revenue growth but faces significant profitability and leverage challenges. High debt levels and negative margins suggest financial instability, while the cash flow situation raises concerns about liquidity. The company needs to improve operational efficiency and manage its debt to enhance financial health.

Income Statement

RE Royalties shows a significant revenue growth rate of 73.9% in the TTM, indicating strong top-line expansion. However, the company struggles with profitability, as evidenced by negative net profit and EBIT margins. The consistent negative margins highlight ongoing challenges in managing costs and achieving operational efficiency.

Balance Sheet

The company's balance sheet reflects high leverage with a debt-to-equity ratio of 17.99 in the TTM, suggesting significant financial risk. The negative return on equity indicates that the company is not generating positive returns for shareholders. The equity ratio is low, further emphasizing the reliance on debt financing.

Cash Flow

Cash flow analysis reveals a challenging situation with negative free cash flow and a low operating cash flow to net income ratio. Although there is a positive free cash flow growth rate, the overall cash flow position remains weak, indicating potential liquidity issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	7.60M	8.59M	9.81M	4.24M	1.93M	2.37M
Gross Profit	5.88M	7.70M	9.45M	3.89M	1.63M	2.09M
EBITDA	-5.62M	-5.02M	1.52M	1.61M	-1.01M	124.32K
Net Income	-10.30M	-9.27M	-1.81M	-433.82K	-2.13M	-446.65K
Balance Sheet
Total Assets	49.53M	53.81M	53.98M	42.61M	35.19M	27.61M
Cash, Cash Equivalents and Short-Term Investments	11.71M	16.55M	14.44M	7.58M	20.10M	11.70M
Total Debt	44.33M	44.51M	36.28M	21.56M	20.60M	10.51M
Total Liabilities	45.99M	46.81M	36.89M	22.22M	20.79M	10.60M
Stockholders Equity	1.44M	5.20M	15.33M	19.78M	14.41M	17.01M
Cash Flow
Free Cash Flow	-2.73M	-8.73M	-4.68M	-12.50M	-8.92M	-3.72M
Operating Cash Flow	1.87M	2.50M	792.29K	141.56K	143.31K	908.48K
Investing Cash Flow	-104.17K	-1.86M	-3.59M	-17.40M	616.21K	-2.76M
Financing Cash Flow	-8.63M	1.24M	9.87M	4.36M	7.64M	9.52M

RE Royalties Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 0.26
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RE, the sentiment is Neutral. The current price of 0.26 is above the 20-day moving average (MA) of 0.25, below the 50-day MA of 0.28, and below the 200-day MA of 0.38, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 52.67 is Neutral, neither overbought nor oversold. The STOCH value of 69.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:RE.

RE Royalties Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
REVV	59 Neutral	C$14.67M	-4.12	-69.20%	―	-31.40%	-354.49%
SXI	58 Neutral	―	―	―	―	1.97%	16.73%
WEB	54 Neutral	C$54.10M	3.24	42.58%	―	―	-51.92%
GIP	52 Neutral	C$63.74M	-3.51	-23.88%	―	-19.22%	11.82%
RE	41 Neutral	C$11.71M	-1.11	-136.45%	14.81%	155.71%	-375.75%
GRB	35 Underperform	C$18.38M	-2.90	-99.46%	―	―	-37.48%

RE Royalties Corporate Events

RE Royalties Cancels Equity Offering Amid Early Loan Repayments

RE Royalties Ltd. has canceled its previously announced non-brokered private placement offering due to early loan repayments from clients and recent share price volatility. Despite interest from new investors, the company decided that proceeding with the offering would not benefit shareholders. The early repayments have left the company well-capitalized, allowing it to explore new investment opportunities and meet upcoming bond maturities, with a focus on unlocking shareholder value.

RE Royalties Closes Fully Subscribed $3.4 Million Financing Offering

RE Royalties Ltd. announced the closing of its fully subscribed non-brokered private placement offering, raising up to $3.4 million through the issuance of 10,625,000 units at $0.32 per unit. Each unit includes a common share and a warrant, with proceeds intended for working capital and general corporate purposes. This financing move strengthens the company’s financial position and supports its growth strategy in the renewable energy sector.

RE Royalties Launches $3.4 Million Equity Offering to Bolster Renewable Energy Investments

RE Royalties Ltd. announced a non-brokered private placement offering of up to 10,625,000 units at $0.32 per unit, aiming to raise $3,400,000. This offering will support the company’s working capital and general corporate purposes, potentially enhancing its market position in the renewable energy sector. The units, consisting of common shares and purchase warrants, will be offered under specific exemptions and are not subject to resale restrictions in Canada. The offering’s success depends on receiving necessary approvals, including from the TSX Venture Exchange.