T1 Energy Stock To $5?
T1 Energy (TE) stock has jumped 13% during the past day, and is currently trading at $7.09. Our multi-factor assessment suggests that it may be time to sell TE stock. We have, overall, a pessimistic view of the stock, and a price of $5 may not be out of reach. We believe there are several things to fear in TE stock given its overall Weak operating performance and financial condition. Hence, despite its Moderate valuation, this makes the stock look Risky.
Below is our assessment:
| CONCLUSION | |
|---|---|
| What you pay: | |
| Valuation | Moderate |
| What you get: | |
| Growth | Moderate |
| Profitability | Very Weak |
| Financial Stability | Weak |
| Downturn Resilience | N/A |
| Operating Performance | Weak |
| Stock Opinion | Risky |
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Let’s get into details of each of the assessed factors but before that, for quick background: With $1.1 Bil in market cap, T1 Energy is an electric and gas utility holding company providing regulated generation, transmission, distribution, and sale of electric energy to retail customers and utilities.
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[1] Valuation Looks Moderate
| TE | S&P 500 | |
|---|---|---|
| Price-to-Sales Ratio | 2.8 | 3.3 |
| Price-to-Earnings Ratio | -2.1 | 25.1 |
| Price-to-Free Cash Flow Ratio | -20.8 | 21.4 |
This table highlights how TE is valued vs broader market.
[2] Growth Is Moderate
- Its revenues have grown 0.0% from $0.0 to $400 Mil in the last 12 months
- Also, its quarterly revenues grew 0.0% to $211 Mil in the most recent quarter from $0.0 a year ago.
| TE | S&P 500 | |
|---|---|---|
| 3-Year Average | 5.6% | |
| Latest Twelve Months* | � | 6.5% |
| Most Recent Quarter (YoY)* | � | 7.5% |
This table highlights how TE is growing vs broader market.
[3] Profitability Appears Very Weak
- TE last 12 month operating income was $-123 Mil representing operating margin of -30.7%
- With cash flow margin of 5.6%, it generated nearly $22 Mil in operating cash flow over this period
- For the same period, TE generated nearly $-546 Mil in net income, suggesting net margin of about -136.6%
| TE | S&P 500 | |
|---|---|---|
| Current Operating Margin | -30.7% | 18.8% |
| Current OCF Margin | 5.6% | 20.7% |
| Current Net Income Margin | -136.6% | 12.8% |
This table highlights how TE profitability vs broader market.
[4] Financial Stability Looks Weak
- TE Debt was $702 Mil at the end of the most recent quarter, while its current Market Cap is $1.1 Bil. This implies Debt-to-Equity Ratio of 61.7%
- TE Cash (including cash equivalents) makes up $34 Mil of $1.4 Bil in total Assets. This yields a Cash-to-Assets Ratio of 2.4%
| TE | S&P 500 | |
|---|---|---|
| Current Debt-to-Equity Ratio | 61.7% | 20.7% |
| Current Cash-to-Assets Ratio | 2.4% | 7.2% |
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