Greenlane Renewables Inc. (TSE:GRN) Is Expected To Breakeven In The Near Future

Greenlane Renewables Inc. (TSE:GRN) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Greenlane Renewables Inc. designs, develops, sells, and services a range of biogas upgrading systems worldwide. The company’s loss has recently broadened since it announced a CA$2.5m loss in the full financial year, compared to the latest trailing-twelve-month loss of CA$5.5m, moving it further away from breakeven. The most pressing concern for investors is Greenlane Renewables' path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.

View our latest analysis for Greenlane Renewables

According to the 11 industry analysts covering Greenlane Renewables, the consensus is that breakeven is near. They expect the company to post a final loss in 2023, before turning a profit of CA$5.1m in 2024. The company is therefore projected to breakeven around 2 years from today. How fast will the company have to grow each year in order to reach the breakeven point by 2024? Working backwards from analyst estimates, it turns out that they expect the company to grow 70% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

Underlying developments driving Greenlane Renewables' growth isn’t the focus of this broad overview, though, keep in mind that typically an energy business has lumpy cash flows which are contingent on the natural resource and stage at which the company is operating. This means that a high growth rate is not unusual, especially if the company is currently in an investment period.

Before we wrap up, there’s one aspect worth mentioning. Greenlane Renewables currently has no debt on its balance sheet, which is quite unusual for a cash-burning oil and gas company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

This article is not intended to be a comprehensive analysis on Greenlane Renewables, so if you are interested in understanding the company at a deeper level, take a look at Greenlane Renewables' company page on Simply Wall St. We've also compiled a list of essential factors you should further research:

1. Valuation: What is Greenlane Renewables 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 Greenlane Renewables is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Greenlane Renewables’s board and the CEO’s background.
3. 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.