RE Royalties (RE) AI Stock Analysis

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RE Royalties

(OTC:RE)

Rating:49Neutral

Price Target:

C$0.50

▲(13.64%Upside)

The overall stock score is primarily impacted by the company's financial instability, marked by negative profitability and cash flow metrics. Technical analysis further indicates bearish momentum, though some indicators suggest possible recovery. Valuation is bolstered by a high dividend yield. Recent corporate events show strategic moves towards improvement, but the financial challenges remain a significant concern.

RE Royalties (RE) vs. iShares MSCI Canada ETF (EWC)

Market Cap

$19.00M

Dividend Yield9.2%

Average Volume (3M)16.47K

Price to Earnings (P/E)―

Beta (1Y)0.34

Revenue Growth-22.97%

EPS Growth-252.29%

CountryCA

Employees9

SectorUtilities

Sector Strength77

IndustryRenewable Utilities

Share Statistics

EPS (TTM)N/A

Shares Outstanding43,376,804

10 Day Avg. Volume26,698

30 Day Avg. Volume16,471

Financial Highlights & Ratios

PEG Ratio0.13

Price to Book (P/B)4.47

Price to Sales (P/S)0.00

P/FCF Ratio-1.91

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$0.49

Price Target Upside12.09% Upside

Rating ConsensusHold

Number of Analyst Covering0

RE Royalties Business Overview & Revenue Model

Company DescriptionRE Royalties (RE) is a pioneering company in the renewable energy sector that focuses on providing innovative financing solutions. The company specializes in acquiring and managing a portfolio of royalty interests in renewable energy projects, including solar, wind, and hydroelectric ventures. By leveraging its expertise in the energy market, RE Royalties offers financial flexibility and stability to project developers, enabling the growth and expansion of clean energy initiatives.

How the Company Makes MoneyRE Royalties makes money primarily through the acquisition of royalty interests in renewable energy projects. The company invests capital in exchange for a percentage of the revenue generated by these projects over time. This revenue model allows RE Royalties to earn recurring income as the projects produce and sell renewable energy. Additionally, the company may form strategic partnerships with energy developers and operators, which can enhance its investment opportunities and revenue potential. By focusing on projects with strong long-term cash flow prospects, RE Royalties aims to generate stable and predictable returns for its investors.

RE Royalties Earnings Call Summary

Earnings Call Date:May 29, 2025

(Q3-2024)

% Change Since: -4.35%|

Next Earnings Date:Sep 02, 2025

Earnings Call Sentiment Neutral

The call highlighted significant new investments and a strong cash position, as well as a notable increase in EBITDA and a reduced net loss. However, there were declines in revenue and gross profit compared to the prior year.

Q3-2024 Updates

Positive Updates

Successful Completion of Series 4 Green Bonds

Raised total gross proceeds of approximately $7 million, contributing to a healthy cash balance of approximately $20 million for future opportunities.

New Transactions and Investments

Completed three major transactions, including a $10 million loan for solar projects in the Maldives, a $3 million facility for battery storage systems in Ontario, and a $6.3 million loan to Alpin Solar for a 200-megawatt project in Alberta.

Increase in EBITDA

EBITDA for Q3 2024 was $1 million, an increase of $2.6 million compared to the prior year, with a 77% increase over the 9 months ending September 30, 2024.

Decrease in Net Loss

Net loss after income tax of $195,000 for Q3 2024, significantly reduced from $2.8 million in the prior year.

Negative Updates

Revenue and Income Decline

Revenue and income for Q3 2024 decreased by 12% compared to the prior year, with a 14% decrease over the 9 months ending September 30, 2024, due to lower finance income and a one-time royalty buyout in the prior year.

Gross Profit Decrease

Gross profit decreased by 12% for Q3 2024 and by 16% for the 9 months ending September 30, 2024, compared to the prior year.

Company Guidance

During the RE Royalties Q3 2024 earnings call, the company provided guidance on their financial performance and strategic investments. They reported a decrease in revenue and income by 12% to $1.7 million for the third quarter, attributed to early loan repayments from clients. However, EBITDA increased by $2.6 million compared to the previous year, reaching $1 million, due to the absence of a prior year's $3.1 million provision for expected credit loss. The company completed significant transactions, including a $10 million loan for solar projects in the Maldives and a $3 million loan for battery storage systems in Ontario, which are expected to bolster future revenues and cash flows. As of September 30, 2024, RE Royalties held cash and cash equivalents of $18.4 million, and they are actively evaluating additional investment opportunities to enhance their project pipeline.

RE Royalties Financial Statement Overview

Summary

RE Royalties faces significant challenges with profitability and cash flow. Revenue inconsistency, high leverage, and negative margins highlight financial instability. Continued negative free cash flow and heavy debt burden present risks to financial health, necessitating focus on improving operational efficiency and revenue growth.

Income Statement

Neutral

The company's revenue has shown inconsistency with a significant drop in TTM compared to the previous year. Gross and net profit margins are negative, indicating an operational challenge. The TTM EBIT and EBITDA margins are also negative, reflecting ongoing profitability issues.

Balance Sheet

Negative

The balance sheet reveals high leverage with a debt-to-equity ratio that indicates significant financial risk. The equity ratio is low, showing limited equity backing for assets, which may pose potential stability concerns. Return on equity is negative due to net losses.

Cash Flow

Negative

Free cash flow is negative, reflecting cash strain. The operating cash flow to net income ratio is positive, suggesting operational cash generation despite net losses. However, the free cash flow trend is negative, which emphasizes liquidity stress.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.59M	9.81M	867.51K	1.93M	2.37M
Gross Profit	7.70M	9.45M	522.70K	1.63M	2.09M
EBITDA	-5.40M	1.52M	1.50M	-799.75K	751.47K
Net Income	-9.27M	-3.12M	-726.19K	-2.13M	-446.65K
Balance Sheet
Total Assets	53.81M	53.98M	42.61M	35.19M	27.61M
Cash, Cash Equivalents and Short-Term Investments	16.55M	14.44M	7.58M	20.10M	2.62M
Total Debt	44.51M	36.28M	21.56M	20.60M	10.51M
Total Liabilities	46.81M	36.89M	22.22M	20.79M	10.60M
Stockholders Equity	5.20M	15.33M	19.78M	14.41M	17.01M
Cash Flow
Free Cash Flow	-8.73M	-4.68M	-13.86M	-8.92M	-3.72M
Operating Cash Flow	2.50M	792.29K	-1.22M	143.31K	908.48K
Investing Cash Flow	-1.86M	-3.59M	-17.39M	616.21K	-2.76M
Financing Cash Flow	1.24M	12.56M	5.71M	7.64M	9.52M

RE Royalties Technical Analysis

Technical Analysis Sentiment

Negative

Last Price0.44

Price Trends

50DMA

0.46

Negative

100DMA

0.46

Negative

200DMA

0.46

Negative

Market Momentum

MACD

>-0.01

Positive

RSI

42.30

Neutral

STOCH

60.83

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:RE, the sentiment is Negative. The current price of 0.44 is below the 20-day moving average (MA) of 0.45, below the 50-day MA of 0.46, and below the 200-day MA of 0.46, indicating a bearish trend. The MACD of >-0.01 indicates Positive momentum. The RSI at 42.30 is Neutral, neither overbought nor oversold. The STOCH value of 60.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:RE.

RE Royalties Peers Comparison

Overall Rating

UnderperformOutperform

Sector (60)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REVV	67 Neutral	C$17.30M	7.08	73.47%	―	371.84%	―
Sector *	60 Neutral	C$5.15B	-25.79	-19.26%	3.76%	12.02%	-69.08%
WEB	54 Neutral	C$66.69M	3.38	43.72%	―	―	-37.73%
GIP	50 Neutral	C$70.09M	―	-24.89%	―	-13.68%	-1548.28%
RE	49 Neutral	$19.00M	―	-103.52%	9.20%	-22.97%	-252.29%
SXI	45 Neutral	C$11.74M	―	-27.97%	―	1.97%	16.73%
GRB	35 Underperform	C$16.48M	―	-90.04%	―	-100.00%	-14.57%

* Utilities Sector Average

Performance Comparison

TSE:RE

RE Royalties

0.44

>-0.01

-1.58%

TSE:SXI

Synex Internt'l

2.34

0.50

27.17%

TSE:GRB

Greenbriar Capital

0.44

-0.16

-26.67%

TSE:WEB

Westbridge Energy

0.66

-0.20

-23.26%

TSE:GIP

Green Impact Partners Inc

3.51

-0.24

-6.40%

TSE:REVV

ReVolve Renewable Power Corp

0.26

-0.10

-27.78%

RE Royalties Corporate Events

Business Operations and StrategyFinancial Disclosures

RE Royalties Reports Fiscal 2024 Results and Strategic Investments

Positive

May 5, 2025

RE Royalties Ltd. announced its fiscal 2024 year-end results, highlighting a transitionary year with the addition of new battery and solar assets in Ontario, and new loan and royalty investments. The company successfully reinvested in new opportunities despite some client refinancing delays, and anticipates increased revenues and cash flow from a new acquisition loan in the current fiscal year. Key business highlights include agreements to support solar and hydro projects in Canada and the Maldives, with secured loans and revenue royalties expected to generate stable cash flows.

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 10, 2025