In a June 9 research note, PI Financial analyst Devin Schilling reported that UGE International Ltd. (UGE:TSX.V; UGEIF:OTCQB) is rapidly gaining momentum in growing its community and commercial solar solutions backlog.
"We continue to view UGE as being well on its way to building out a long-term (high margin), recurring revenue stream through the company's transition into a solar asset owner/operator," Schilling commented.
Additionally, with the recent pullback in the renewable energy firm's share price, now about CA$1.19 per share, it is now at an attractive entry point for investors, Schilling pointed out. Plus, it offers a potential fourbagger return given PI Financial's CA$4.50 per share target price on it.
The latest addition to UGE's backlog, its largest solar project to date, is a 1.6 megawatt (1.6 MW) rooftop system in New York that the energy company will develop, build, own and operate, Schilling noted. The financial aspects of the agreement were not disclosed, but based on a previous similar undertaking, PI Financial estimated this project could generate US$0.3–$0.4 million (US$0.3–0.4M) annually once the system is up and running, expected in mid-2022.
Schilling highlighted that once that happens, UGE's "self-financed projects are anticipated to generate recurring revenue over the entire project life (+25 years) at investment and implementation plan-level margins," which are about 70% for larger independent power producers.
This newest project in New York continues UGE's success with quickly lining up projects. Last quarter, the company's backlog encompassed 41 self-financed solar solutions totaling about 71 MW, or $130M in value. To date, the New York-headquartered firm completed three such projects.
"We anticipate the bulk of this backlog being built out in fiscal years 2022 and 2023," Schilling wrote.
PI Financial has a Buy rating on UGE.
"With a turnaround largely complete and a strategic shift entering into the owner/operator business model behind them, we believe UGE is well positioned to benefit from the rapidly growing solar market in the years to come," Schilling concluded.
[NLINSERT]Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: ?????. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of ?????, a company mentioned in this article.
