Innergex Renewable Energy (TSX:INE) - Share price, News & Analysis

Q: What is the Fair Price of INE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

INE (CA$19.54) is trading below our estimate of [[fair value]] (CA$20.95)

INE fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	0/6
Financial Health	3/6
Dividends	3/6

INE Stock Overview

Innergex Renewable Energy Inc. operates as an independent renewable power producer in Canada, the United States, France, and Chile.

Rewards

Trading at 6.7% below our estimate of its fair value

Earnings are forecast to grow 73.03% per year

Risk Analysis

Dividend of 3.68% is not well covered by earnings or forecast to be in the next 3 years

Shareholders have been diluted in the past year

Innergex Renewable Energy Competitors

Boralex

TSX:BLX

CA$5.0b

TransAlta Renewables

TSX:RNW

CA$4.8b

Northland Power

TSX:NPI

CA$10.8b

Brookfield Renewable

TSX:BEPC

CA$19.3b

Price History & Performance

Summary of all time highs, changes and price drops for Innergex Renewable Energy
Historical stock prices
Current Share Price	CA$19.54
52 Week High	CA$22.03
52 Week Low	CA$15.89
Beta	0.34
1 Month Change	6.31%
3 Month Change	14.67%
1 Year Change	-1.41%
3 Year Change	31.85%
5 Year Change	35.13%
Change since IPO	134.57%

Shareholder Returns

	INE	CA Renewable Energy	CA Market
7D	0.6%	1.0%	3.0%
1Y	-1.4%	6.3%	0.7%

Return vs Industry: INE underperformed the Canadian Renewable Energy industry which returned 6.3% over the past year.

Return vs Market: INE underperformed the Canadian Market which returned 0.7% over the past year.

Price Volatility

Is INE's price volatile compared to industry and market?
INE volatility
INE Average Weekly Movement	2.9%
Renewable Energy Industry Average Movement	4.4%
Market Average Movement	10.6%
10% most volatile stocks in CA Market	18.9%
10% least volatile stocks in CA Market	4.3%

Stable Share Price: INE is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 3% a week.

Volatility Over Time: INE's weekly volatility (3%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1990	488	Michel Letellier	https://www.innergex.com

Innergex Renewable Energy Inc. operates as an independent renewable power producer in Canada, the United States, France, and Chile. It acquires, owns, develops, and operates hydroelectric facilities, and wind and solar farms, as well as energy storage facilities. The company operates through three segments: Hydroelectric Power Generation, Wind Power Generation, and Solar Power Generation.

Innergex Renewable Energy Fundamentals Summary

How do Innergex Renewable Energy's earnings and revenue compare to its market cap?
INE fundamental statistics
Market Cap	CA$3.99b
Earnings (TTM)	-CA$83.96m
Revenue (TTM)	CA$795.42m

5.0x

P/S Ratio

-47.5x

P/E Ratio

Is INE overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
INE income statement (TTM)
Revenue	CA$795.42m
Cost of Revenue	CA$203.19m
Gross Profit	CA$592.24m
Other Expenses	CA$676.20m
Earnings	-CA$83.96m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	-0.41
Gross Margin	74.46%
Net Profit Margin	-10.56%
Debt/Equity Ratio	361.3%

How did INE perform over the long term?

See historical performance and comparison

Dividends

3.7%

Current Dividend Yield

-166%

Payout Ratio

Does INE pay a reliable dividends?

See INE dividend history and benchmarks

When do you need to buy INE by to receive an upcoming dividend?
Innergex Renewable Energy dividend dates
Ex Dividend Date	Sep 28 2022
Dividend Pay Date	Oct 17 2022
Days until Ex dividend	45 days
Days until Dividend pay date	64 days

Does INE pay a reliable dividends?

See INE dividend history and benchmarks

We’ve recently updated our valuation analysis.

Valuation

Is INE undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Sales vs Peers
Price-To-Sales vs Industry
Price-To-Sales vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for INE?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for INE. This is calculated by dividing INE's market cap by their current preferred multiple.
What is INE's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	CA$3.99b

INE key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	12.3x
Enterprise Value/EBITDA	18.3x
PEG Ratio	n/a

Price to Sales Ratio vs Peers

How does INE's PS Ratio compare to its peers?

INE PS Ratio vs Peers

The above table shows the PS ratio for INE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PS	Estimated Growth	Market Cap
Peer Average	6.1x
BLX Boralex	6.8x	2.9%	CA$5.0b
RNW TransAlta Renewables	9x	0.6%	CA$4.8b
NPI Northland Power	4.6x	-0.5%	CA$10.8b
BEPC Brookfield Renewable	4x	5.2%	CA$19.3b
INE Innergex Renewable Energy	5x	4.0%	CA$4.0b

Price-To-Sales vs Peers: INE is good value based on its Price-To-Sales Ratio (5x) compared to the peer average (6.1x).

Price to Earnings Ratio vs Industry

How does INE's PE Ratio compare vs other companies in the CA Renewable Energy Industry?

Price-To-Sales vs Industry: INE is expensive based on its Price-To-Sales Ratio (5x) compared to the Canadian Renewable Energy industry average (4.1x)

Price to Sales Ratio vs Fair Ratio

What is INE's PS Ratio compared to its Fair PS Ratio? This is the expected PS Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

INE PS Ratio vs Fair Ratio.
Fair Ratio
Current PS Ratio	5x
Fair PS Ratio	4.1x

Price-To-Sales vs Fair Ratio: INE is expensive based on its Price-To-Sales Ratio (5x) compared to the estimated Fair Price-To-Sales Ratio (4.1x).

Share Price vs Fair Value

What is the Fair Price of INE when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: INE (CA$19.54) is trading below our estimate of fair value (CA$20.95)

Significantly Below Fair Value: INE is trading below fair value, but not by a significant amount.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is less than 20% higher than the current share price.

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Future Growth

How is Innergex Renewable Energy forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

73.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: INE is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.6%).

Earnings vs Market: INE is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: INE is expected to become profitable in the next 3 years.

Revenue vs Market: INE's revenue (4% per year) is forecast to grow slower than the Canadian market (6.7% per year).

High Growth Revenue: INE's revenue (4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if INE's Return on Equity is forecast to be high in 3 years time

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Past Performance

How has Innergex Renewable Energy performed over the past 5 years?

Past Performance Score

0/6

Past Performance Score 0/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-59.7%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: INE is currently unprofitable.

Growing Profit Margin: INE is currently unprofitable.

Past Earnings Growth Analysis

Earnings Trend: INE is unprofitable, and losses have increased over the past 5 years at a rate of 59.7% per year.

Accelerating Growth: Unable to compare INE's earnings growth over the past year to its 5-year average as it is currently unprofitable

Earnings vs Industry: INE is unprofitable, making it difficult to compare its past year earnings growth to the Renewable Energy industry (-14%).

Return on Equity

High ROE: INE has a negative Return on Equity (-4.92%), as it is currently unprofitable.

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Financial Health

How is Innergex Renewable Energy's financial position?

Financial Health Score

3/6

Financial Health Score 3/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Stable Cash Runway
Forecast Cash Runway

Financial Position Analysis

Short Term Liabilities: INE's short term assets (CA$501.4M) do not cover its short term liabilities (CA$648.2M).

Long Term Liabilities: INE's short term assets (CA$501.4M) do not cover its long term liabilities (CA$6.2B).

Debt to Equity History and Analysis

Debt Level: INE's net debt to equity ratio (346.9%) is considered high.

Reducing Debt: INE's debt to equity ratio has reduced from 662.9% to 361.3% over the past 5 years.

Balance Sheet

Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: Whilst unprofitable INE has sufficient cash runway for more than 3 years if it maintains its current positive free cash flow level.

Forecast Cash Runway: INE is unprofitable but has sufficient cash runway for more than 3 years, even with free cash flow being positive and shrinking by 0.4% per year.

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Dividend

What is Innergex Renewable Energy current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

3.68%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: INE's dividend (3.68%) is higher than the bottom 25% of dividend payers in the Canadian market (1.82%).

High Dividend: INE's dividend (3.68%) is low compared to the top 25% of dividend payers in the Canadian market (5.31%).

Stability and Growth of Payments

Stable Dividend: INE's dividends per share have been stable in the past 10 years.

Growing Dividend: INE's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: INE is paying a dividend but the company is unprofitable.

Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (124.3%), INE's dividend payments are not well covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.9yrs

Average management tenure

CEO

Michel Letellier (57 yo)

14.83yrs

Tenure

CA$2,000,519

Compensation

Mr. Michel Letellier, MBA, has been the Chief Executive Officer and President of Innergex Renewable Energy Inc. since October 25, 2007. Mr. Letellier is responsible for providing strategic leadership and o...

CEO Compensation Analysis

Compensation vs Market: Michel's total compensation ($USD1.56M) is below average for companies of similar size in the Canadian market ($USD3.51M).

Compensation vs Earnings: Michel's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: INE's management team is considered experienced (4.9 years average tenure).

Board Members

Experienced Board: INE's board of directors are considered experienced (5.3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 13.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/08/13 00:00
End of Day Share Price	2022/08/12 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31