Renewi (LSE:RWI) - Share price, News & Analysis

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

RWI (£8.12) is trading below our estimate of [[fair value]] (£15.52)

RWI fundamental analysis
Snowflake Score
Valuation	6/6
Future Growth	2/6
Past Performance	5/6
Financial Health	2/6
Dividends	0/6

RWI Stock Overview

Renewi plc provides waste-to-product services.

Rewards

Trading at 47.7% below our estimate of its fair value

Earnings are forecast to grow 11.02% per year

Earnings grew by 1230.4% over the past year

Risk Analysis

Has a high level of debt

Renewi Competitors

RPS Group

LSE:RPS

UK£535.2m

Mitie Group

LSE:MTO

UK£1.1b

Serco Group

LSE:SRP

UK£2.1b

Water Intelligence

AIM:WATR

UK£138.9m

Price History & Performance

Summary of all time highs, changes and price drops for Renewi
Historical stock prices
Current Share Price	UK£8.12
52 Week High	UK£8.55
52 Week Low	UK£5.00
Beta	1.34
1 Month Change	5.87%
3 Month Change	29.51%
1 Year Change	56.15%
3 Year Change	167.11%
5 Year Change	-12.69%
Change since IPO	-55.87%

Recent News & Updates

Jul 08

Is Now The Time To Look At Buying Renewi plc (LON:RWI)?

While Renewi plc ( LON:RWI ) might not be the most widely known stock at the moment, it received a lot of attention...

Shareholder Returns

	RWI	GB Commercial Services	GB Market
7D	6.6%	0.4%	0.8%
1Y	56.2%	2.3%	-6.4%

Return vs Industry: RWI exceeded the UK Commercial Services industry which returned 2.3% over the past year.

Return vs Market: RWI exceeded the UK Market which returned -6.4% over the past year.

Price Volatility

Is RWI's price volatile compared to industry and market?
RWI volatility
RWI Average Weekly Movement	4.6%
Commercial Services Industry Average Movement	5.1%
Market Average Movement	5.4%
10% most volatile stocks in GB Market	10.8%
10% least volatile stocks in GB Market	2.7%

Stable Share Price: RWI is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 5% a week.

Volatility Over Time: RWI's weekly volatility (5%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1880	6,641	Otto de Bont	https://www.renewi.com/en

Renewi plc provides waste-to-product services. The company operates through Commercial Waste, Mineralz & Water, and Specialities segments. The Commercial Waste segment engages in the collection and treatment of commercial waste in the Netherlands and Belgium; and processing of wood, aggregates, plastics, paper products, and organic waste.

Renewi Fundamentals Summary

How do Renewi's earnings and revenue compare to its market cap?
RWI fundamental statistics
Market Cap	€759.77m
Earnings (TTM)	€74.50m
Revenue (TTM)	€1.87b

10.3x

P/E Ratio

0.4x

P/S Ratio

Is RWI overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
RWI income statement (TTM)
Revenue	€1.87b
Cost of Revenue	€1.52b
Gross Profit	€353.30m
Other Expenses	€278.80m
Earnings	€74.50m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

Nov 10, 2022

Earnings per share (EPS)	0.93
Gross Margin	18.90%
Net Profit Margin	3.98%
Debt/Equity Ratio	129.6%

How did RWI perform over the long term?

See historical performance and comparison

We’ve recently updated our valuation analysis.

Valuation

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

Valuation Score

6/6

Valuation Score 6/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings 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 RWI?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for RWI. This is calculated by dividing RWI's market cap by their current preferred multiple.
What is RWI's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	€759.77m

RWI 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	0.7x
Enterprise Value/EBITDA	6.9x
PEG Ratio	0.9x

Price to Earnings Ratio vs Peers

How does RWI's PE Ratio compare to its peers?

RWI PE Ratio vs Peers

The above table shows the PE ratio for RWI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	41.6x
RPS RPS Group	90.7x	32.0%	UK£535.2m
MTO Mitie Group	34.5x	53.2%	UK£1.1b
SRP Serco Group	13x	8.1%	UK£2.1b
WATR Water Intelligence	29.1x	n/a	UK£138.9m
RWI Renewi	10.3x	11.0%	UK£650.1m

Price-To-Earnings vs Peers: RWI is good value based on its Price-To-Earnings Ratio (10.3x) compared to the peer average (41.9x).

Price to Earnings Ratio vs Industry

How does RWI's PE Ratio compare vs other companies in the GB Commercial Services Industry?

Price-To-Earnings vs Industry: RWI is good value based on its Price-To-Earnings Ratio (10.3x) compared to the UK Commercial Services industry average (30.2x)

Price to Earnings Ratio vs Fair Ratio

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

RWI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	10.3x
Fair PE Ratio	24.8x

Price-To-Earnings vs Fair Ratio: RWI is good value based on its Price-To-Earnings Ratio (10.3x) compared to the estimated Fair Price-To-Earnings Ratio (24.8x).

Share Price vs Fair Value

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

Below Fair Value: RWI (£8.12) is trading below our estimate of fair value (£15.52)

Significantly Below Fair Value: RWI is trading below fair value by more than 20%.

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 more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.

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Future Growth

How is Renewi forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

Future Growth Score

2/6

Future Growth Score 2/6

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

11.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: RWI's forecast earnings growth (11% per year) is above the savings rate (0.9%).

Earnings vs Market: RWI's earnings (11% per year) are forecast to grow faster than the UK market (9.9% per year).

High Growth Earnings: RWI's earnings are forecast to grow, but not significantly.

Revenue vs Market: RWI's revenue (3.5% per year) is forecast to grow slower than the UK market (4% per year).

High Growth Revenue: RWI's revenue (3.5% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: RWI's Return on Equity is forecast to be low in 3 years time (18.6%).

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Past Performance

How has Renewi performed over the past 5 years?

Past Performance Score

5/6

Past Performance Score 5/6

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

42.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: RWI has high quality earnings.

Growing Profit Margin: RWI's current net profit margins (4%) are higher than last year (0.3%).

Past Earnings Growth Analysis

Earnings Trend: RWI has become profitable over the past 5 years, growing earnings by 42.4% per year.

Accelerating Growth: RWI's earnings growth over the past year (1230.4%) exceeds its 5-year average (42.4% per year).

Earnings vs Industry: RWI earnings growth over the past year (1230.4%) exceeded the Commercial Services industry 139.1%.

Return on Equity

High ROE: Whilst RWI's Return on Equity (22.29%) is high, this metric is skewed due to their high level of debt.

Discover strong past performing companies

Financial Health

How is Renewi's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: RWI's short term assets (€385.9M) do not cover its short term liabilities (€732.7M).

Long Term Liabilities: RWI's short term assets (€385.9M) do not cover its long term liabilities (€880.9M).

Debt to Equity History and Analysis

Debt Level: RWI's net debt to equity ratio (113.7%) is considered high.

Reducing Debt: RWI's debt to equity ratio has increased from 123.6% to 129.6% over the past 5 years.

Debt Coverage: RWI's debt is well covered by operating cash flow (41.2%).

Interest Coverage: RWI's interest payments on its debt are well covered by EBIT (6x coverage).

Balance Sheet

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Dividend

What is Renewi current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

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

1.72%

Forecast Dividend Yield

Dividend Yield vs Market

Notable Dividend: Unable to evaluate RWI's dividend yield against the bottom 25% of dividend payers, as the company has not reported any recent payouts.

High Dividend: Unable to evaluate RWI's dividend yield against the top 25% of dividend payers, as the company has not reported any recent payouts.

Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if RWI's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if RWI's dividend payments have been increasing.

Earnings Payout to Shareholders

Earnings Coverage: RWI is not paying a notable dividend for the UK market.

Cash Payout to Shareholders

Cash Flow Coverage: Unable to calculate sustainability of dividends as RWI has not reported any payouts.

Discover strong dividend paying companies

Management

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

3.2yrs

Average management tenure

CEO

Otto de Bont

3.33yrs

Tenure

€2,661,290

Compensation

Mr. Otto de Bont, MSC has been the Chief Executive Officer and Director at Renewi plc since April 1, 2019. Mr. de Bont was Managing Director of Netherlands Commercial Division at Renewi plc since May 2017...

CEO Compensation Analysis

Compensation vs Market: Otto's total compensation ($USD2.72M) is above average for companies of similar size in the UK market ($USD1.36M).

Compensation vs Earnings: Otto's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: RWI's management team is considered experienced (3.2 years average tenure).

Board Members

Experienced Board: RWI's board of directors are considered experienced (4 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.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/09 00:00
End of Day Share Price	2022/08/09 00:00
Earnings	2022/03/31
Annual Earnings	2022/03/31