Loop Energy

CN: LPEN

Market CapC$71m

Last Close C$2.07

Loop Energy, headquartered in Vancouver, develops and manufactures patented hydrogen proton exchange membrane fuel cells. It is targeting the return to base fleet market, where it has a growing order book with 12 customers.

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Investment summary

Loop Energy’s patented PEM fuel cell technology has a leading combination of fuel efficiency, power density and durability, resulting in an attractive total cost of ownership (TCO), providing the company with a competitive advantage. This is supported by a recent transformational commercial order with electric truck maker Tevva, won via a competitive tender process. Loop Energy is targeting disruptors and early movers in electrification of the return-to-base fleet segment of road transport, which should help it to ramp up sales and drive down costs relatively quickly. We consider only the truck and bus markets, which are a portion of the company’s total addressable market, and estimate a US$4bn market in 2030 and a c US$60bn market by 2050. Our DCF valuation for Loop Energy implies C$4.5/share at a 15% cost of capital, which is more than double the current share price. This increases sharply as the investment case de-risks.

Y/E Dec
Revenue (C$m)
EBITDA (C$m)
PBT (C$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2020A 0.5 (7.5) (8.9) (43.98) N/A N/A
2021A 1.4 (23.5) (25.1) (74.77) N/A N/A
2022E 4.2 (39.4) (42.5) (118.89) N/A N/A
2023E 28.0 (43.9) (47.6) (132.48) N/A N/A
Content on Loop Energy
Loop Energy – Commercial orders underway
Industrials | research Initiation | 15 September 2022
Pem fuel cell
Loop Energy: Propelling hydrogen fuel cell growth
Industrials | blog | 14 September 2022
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Share price graph
Balance sheet
Forecast net debt (C$m) 2.6
Forecast gearing ratio (%) N/A
Price performance
%
1m
3m
12m
Actual 3.5 29.4 (59.6)
Relative* 10.3 33.4 (56.3)
52-week high/low C$5.8/C$1.5
*% relative to local index
Key management
Kent Thexton Chairman
Ben Nyland CEO
Damian Towns CFO

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