Genie Energy Ltd. (GNE) supplies electricity and natural gas to residential and small business customers in the United States, Finland, Sweden, Japan, and internationally. It operates through Genie Retail Energy, GRE International, and Genie Renewables segments.
The company reported robust financial performance for the last quarter, with solid margins in its retail book. The strong performance was partly fueled by the decision to let certain less profitable meters attrite ahead of the winter volatility and adjust the forward book accordingly.
Michael Stein, chief executive officer of GNE, said, “Genie Retail Energy, or GRE, our U.S. retail business, was the main driver behind this outstanding quarter, generating over $30 million in Adjusted EBITDA. Overall, the first quarter's results underscored the flexibility of our business model and our ability to leverage our market expertise and execution capabilities to generate strong performance, including robust cash flows and significant value for Genie Energy shareholders."
The stock has gained 67% year-to-date and 76.1% over the past six months to close its last trading session at $9.30.
Here is what could shape GNE’s performance in the near term:
Robust Financials
GNE’s total revenue came in at $83.90 million for the first quarter ended March 31, 2022. Its income from operations came in at $24.40 million, compared to a loss of $5.50 million in the previous period.
Its net income amounted to $17.50 million compared to a loss of $2.40 million. The company’s EPS stood at $0.67 compared to a loss per share of $0.09 in the prior period.
Strong Profitability
GNE’s trailing-12-month net income margin of 13.84% is 31% higher than the industry average of 10.56%. In addition, its trailing-12-month gross profit margin of 42.49% is 3.1% higher than the 41.23% industry average. Also, its trailing-12-month ROE, ROC, and ROA are 383.9%, 1026.7%, and 799.8% higher than the respective industry averages.
Discounted Valuation
In terms of 0.45x trailing-12-months EV/Sales, the stock is trading 89.3% lower than its industry average of 4.21x. Also, its 0.67x trailing-12-months Price/Sales is trading 71.8% lower than its industry average of 2.37x.
POWR Ratings Reflect Solid Prospects
GNE has an overall A grade, which equates to Strong Buy in our proprietary POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree.
Our proprietary rating system also evaluates each stock based on eight distinct categories. GNE has an A grade for Value and a B grade for Quality and Growth. GNE’s lower-than-industry valuation is consistent with its Value grade. Its higher profitability is in sync with the Quality grade. In addition, its impressive growth attributes justify the Growth grade.
Among the 67 stocks in the D-rated Utilities - Domestic industry, it is ranked #1.
Beyond what I stated above, we have graded GNE for Stability, Sentiment, and Momentum. Get all GNE ratings here.
Bottom Line
GNE has gained 5.5% over the past month. The stock is currently trading above its 50-day and 200-day moving averages of $8.17 and $6.44, respectively, indicating an uptrend.
The company’s robust financial performance, impressive revenue growth across all its segments, and lower valuation reflect its solid positioning. Therefore, we think GNE could be a solid addition to your portfolio.
How does Genie Energy Ltd. (GNE) Stack Up Against its Peers?
GNE has an overall POWR Rating of A, which equates to a Strong Buy. This rating is superior to its peers within the Utilities - Domestic industry, such as Brookfield Infrastructure Corp. Cl A (BIPC), Vistra Energy Corp.(VST), and UNITIL Corporation(UTI), which all are rated C (Neutral).
GNE shares were trading at $9.52 per share on Thursday afternoon, up $0.22 (+2.37%). Year-to-date, GNE has gained 74.80%, versus a -15.41% rise in the benchmark S&P 500 index during the same period.
About the Author: Spandan Khandelwal
Spandan's is a financial journalist and investment analyst focused on the stock market. With her ability to interpret financial data, she aims to help investors evaluate the fundamentals of a company before investing.
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