Analysts Expect Innergex Renewable Energy Inc. (TSE:INE) To Breakeven Soon
Innergex Renewable Energy Inc. (TSE:INE) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Innergex Renewable Energy Inc. operates as an independent renewable power producer in Canada, the United States, France, and Chile. The CA$3.6b market-cap company posted a loss in its most recent financial year of CA$197m and a latest trailing-twelve-month loss of CA$18m shrinking the gap between loss and breakeven. As path to profitability is the topic on Innergex Renewable Energy's investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Innergex Renewable Energy
Consensus from 7 of the Canadian Renewable Energy analysts is that Innergex Renewable Energy is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of CA$44m in 2022. Therefore, the company is expected to breakeven roughly a year from now or less! We calculated the rate at which the company must grow to meet the consensus forecasts predicting breakeven within 12 months. It turns out an average annual growth rate of 47% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
We're not going to go through company-specific developments for Innergex Renewable Energy given that this is a high-level summary, however, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
Before we wrap up, there’s one issue worth mentioning. Innergex Renewable Energy currently has a debt-to-equity ratio of over 2x. Generally, the rule of thumb is debt shouldn’t exceed 40% of your equity, and the company has considerably exceeded this. Note that a higher debt obligation increases the risk around investing in the loss-making company.
Next Steps:
There are key fundamentals of Innergex Renewable Energy 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 Innergex Renewable Energy, take a look at Innergex Renewable Energy's company page on Simply Wall St. We've also compiled a list of relevant factors you should look at:
Valuation: What is Innergex Renewable Energy 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 Innergex Renewable Energy is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Innergex Renewable Energy’s board and the CEO’s background.
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.
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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.
