Innergex Renewable Energy Inc. (TSE:INE) Is About To Turn The Corner

We feel now is a pretty good time to analyse Innergex Renewable Energy Inc.'s (TSE:INE) business as it appears the company may be on the cusp of a considerable accomplishment. Innergex Renewable Energy Inc. operates as an independent renewable power producer in Canada, the United States, France, and Chile. The CA$1.8b market-cap company posted a loss in its most recent financial year of CA$87m and a latest trailing-twelve-month loss of CA$21m shrinking the gap between loss and breakeven. The most pressing concern for investors is Innergex Renewable Energy's path to profitability – when will it breakeven? We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

Check out our latest analysis for Innergex Renewable Energy

According to the 5 industry analysts covering Innergex Renewable Energy, the consensus is that breakeven is near. They expect the company to post a final loss in 2022, before turning a profit of CA$40m in 2023. The company is therefore projected to breakeven around 12 months from now or less. At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of -0.6%,

Given this is a high-level overview, we won’t go into details of Innergex Renewable Energy's upcoming projects, however, keep in mind that by and large a low or volatile growth rate in the near future is not unusual, especially if the company is currently in 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, which in this case, the company has significantly overshot. A higher level of debt requires more stringent capital management which increases the risk in investing in the loss-making company.

Next Steps:

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

1. 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.
2. 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.
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.