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RE Royalties (TSE:RE)
:RE
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RE Royalties
(OTC:RE)
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Rating:44Neutral
Price Target:
C$0.50
▲(47.06% Upside)
The overall score is primarily influenced by financial instability due to high leverage and negative profitability. Technical indicators show a bearish trend, and while the high dividend yield is attractive, it is overshadowed by the company's financial challenges.
RE Royalties (RE) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$15.18M
Dividend Yield11.94%
Average Volume (3M)43.06K
Price to Earnings (P/E)―
Beta (1Y)-0.15
Revenue Growth169.04%
EPS Growth-111.53%
CountryCA
Employees9
SectorUtilities
Sector Strength65
IndustryRenewable Utilities
Share Statistics
EPS (TTM)-0.02
Shares Outstanding43,376,804
10 Day Avg. Volume54,390
30 Day Avg. Volume43,062
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap3.91
Enterprise Value/Revenue7.68
Enterprise Value/Gross Profit9.63
Enterprise Value/Ebitda-10.27
Forecast
1Y Price Target
$0.50Price Target Upside47.46% Upside
Rating ConsensusHold
Number of Analyst Covering1
RE Royalties Business Overview & Revenue Model
Company DescriptionRE Royalties (RE) is a financial services company that specializes in providing innovative financing solutions to renewable energy projects. Focusing primarily on the solar and wind energy sectors, RE helps developers and operators of renewable energy assets to secure the capital needed for project development and expansion. The company offers unique financial products, including royalty agreements and revenue-based financing, that align the interests of investors with the ongoing performance of renewable energy projects.
How the Company Makes MoneyRE Royalties generates revenue primarily through its royalty agreements, where it receives a percentage of the revenue generated by the renewable energy projects it finances. This model allows the company to earn income as the projects produce energy and generate sales. Additionally, RE may engage in revenue-based financing, providing upfront capital in exchange for a share of the project's future earnings. Key revenue streams include ongoing royalty payments and potential returns from investment in various renewable energy projects. Partnerships with project developers and operators enhance its ability to identify and finance viable projects, contributing significantly to its earnings.
RE Royalties Earnings Call Summary
Earnings Call Date:Aug 27, 2025
(Q3-2024)
| % Change Since: |
Next Earnings Date:Dec 01, 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 exhibits strong revenue growth but faces significant challenges with profitability, high leverage, and liquidity. The negative margins and high debt levels suggest financial instability, requiring improvements in operational efficiency and debt management.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.35
Negative
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.25
Negative
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.30
Negative
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 7.74M | 1.74M | 9.81M | 867.51K | 1.93M | 2.37M |
| Gross Profit | 6.17M | 914.48K | 9.45M | 522.70K | 1.63M | 2.09M |
| EBITDA | -5.79M | -5.40M | 1.52M | 1.50M | -799.75K | 751.47K |
| Net Income | -10.02M | -9.27M | -3.12M | -726.19K | -2.13M | -446.65K |
Balance Sheet | ||||||
| Total Assets | 50.27M | 53.81M | 53.98M | 42.61M | 35.19M | 27.61M |
| Cash, Cash Equivalents and Short-Term Investments | 6.54M | 16.55M | 14.44M | 7.58M | 20.10M | 2.62M |
| Total Debt | 44.33M | 44.51M | 36.28M | 21.56M | 20.60M | 10.51M |
| Total Liabilities | 45.86M | 46.81M | 36.89M | 22.22M | 20.79M | 10.60M |
| Stockholders Equity | 2.46M | 5.20M | 15.33M | 19.78M | 14.41M | 17.01M |
Cash Flow | ||||||
| Free Cash Flow | -14.03M | -8.73M | -4.68M | -13.86M | -8.92M | -3.72M |
| Operating Cash Flow | 1.55M | 2.50M | 792.29K | -1.22M | 143.31K | 908.48K |
| Investing Cash Flow | -8.95M | -1.86M | -3.59M | -17.39M | 616.21K | -2.76M |
| Financing Cash Flow | 850.38K | 1.24M | 12.56M | 5.71M | 7.64M | 9.52M |
RE Royalties Technical Analysis
Neutral
0.34
Price Trends
0.38
Negative
0.42
Negative
0.43
Negative
Market Momentum
>-0.01
Negative
51.25
Neutral
51.15
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 0.34 is above the 20-day moving average (MA) of 0.33, below the 50-day MA of 0.38, and below the 200-day MA of 0.43, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 51.25 is Neutral, neither overbought nor oversold. The STOCH value of 51.15 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
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
59 Neutral | C$13.57M | 5.56 | ― | ― | 371.84% | ― | |
54 Neutral | C$84.69M | 4.82 | ― | ― | ― | -46.59% | |
50 Neutral | C$62.30M | -2.99 | -28.61% | ― | -15.02% | -20.61% | |
44 Neutral | $15.18M | ― | -118.29% | 11.94% | 169.04% | -111.53% | |
35 Underperform | C$16.84M | -3.09 | ― | ― | ― | -54.37% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% |
* Utilities Sector Average
TSE:RE
RE Royalties
0.34
-0.10
-23.17%
TSE:GIP
Green Impact Partners Inc
3.00
-0.90
-23.08%
TSE:GRB
Greenbriar Capital
0.41
-0.07
-14.58%
TSE:REVV
ReVolve Renewable Power Corp
0.20
-0.08
-28.57%
TSE:SXI
Synex Internt'l
2.39
0.63
35.80%
TSE:WEB
Westbridge Energy
3.35
0.15
4.69%
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.