Renewable energy sources, including solar, wind, storage, and hydropower, are set for a "variable-speed takeoff" this year, according to researchers at Deloitte Insights.
That could amount to a big opportunity for those investing in companies like Revolve Renewable Power Corp. (TSXV:REVV;OTCQB:REVVF), which has development projects across North America and is significantly undervalued relative to its peers.
"The impact of unprecedented investment in renewable infrastructure will likely become more apparent in 2024," Deloitte said in its outlook for renewable energy in 2024. "Regulatory boosts to renewable energy and transmission buildout could help address grid constraints. And boosts to manufacturing could lay the foundations of a domestic clean energy industry with stronger supply chains supporting solar, wind, storage, and green hydrogen deployment."
In total, the company now has more than 3 gigawatts (GW) of development projects in North America and just closed on its acquisition of WindRiver Power, an operator and developer of wind and hydro projects in British Columbia and Alberta.
"This acquisition is a key milestone in Revolve's stated strategy of utilizing both a development strategy and acquiring operating assets," Water Tower Research analyst Shawn Severson wrote in a February research note. The company is working toward becoming "a dedicated renewable independent power producer focused on long-term recurring revenue and cash flow."
The Catalyst: 'Historic' Investment, Demand Propel Sector
The renewable energy market is estimated to be a total of 4.23 GW in 2024, and it is expected to reach 5.98 GW by 2029, growing at a compound annual growth rate (CAGR) of 7.09%, according to Mordor Intelligence.
Statista reported that the renewable energy industry's value was about US$856 billion in 2021 and is expected to grow to more than US$1.6 trillion by 2027.
Deloitte's report noted the sector is "set for a variable-speed takeoff as historic investment, competitiveness, and demand propel their development."
Renewable energy deployment is expected to grow by 17% to 42 GW in 2024 and account for almost a quarter of electricity generation, according to the Energy Information Administration.
Technical Analyst Clive Maund wrote in January it looked like the stock was set to "commence a major bull market as it just starts to advance out of a large low base pattern."
"The tandem push of federal investments flowing into clean energy and pull of decarbonization demand from public and private entities have never been stronger," Deloitte wrote.
"Moving into 2024, these forces could enable renewables to overcome hurdles caused by the seismic shifts needed to meet the country's climate targets. The uplift and obstacles shaping the year ahead have set the stage for a variable-speed takeoff across renewable technologies, industries, and markets."
As many as 29 jurisdictions representing around half of U.S. electricity retail sales have mandatory renewable portfolio standards, Deloitte reported, 24 requiring zero greenhouse gas (GHG) emissions or 100% renewable energy goals between 2030 and 2050.
On the corporate side, the membership in the RE100, a global initiative for entirely renewable energy, has more than 420 members, including 30 that joined in the first ten months of 2023, Deloitte said. A quarter of them are in the U.S., and many have 2025 target dates.
"As renewables become a larger part of power generation and the portfolio of technologies grows, perceptions could start catching up with the reality that renewables can enhance grid resilience," Deloitte said.
Stock Set for a Bull Market?
Revolve reported a net income of CA$0.9 million, or CA$0.01 per share, for the first quarter of 2024, compared to a loss of CA$0.6 million, or CA$0.01 per share, in Q1 2023.
Severson and colleague Graham Mattison with Water Tower Research noted that the company "trades at a significant discount to its peers," which included Westbridge Renewable Energy Corp. with a share price of CA$0.94 on Friday compared to REVV's CA$0.29 and Greenbriar Sustainable Living Inc., which was trading at CA$0.91 per share on the same day.
"(REVV) has a . . . larger development pipeline than many of its peers, and further expected payments," the analysts said.
Revolve is also ranked among the top ten undervalued stocks in the Utilities – Independent Power Producers industry on the TSX Venture Exchange, with a 7% upside between its price and valuation, The Globe and Mail reported.
On Friday, Westbridge's market cap was about CA$92 million, while REVV's was about CA$18 million. Greenbriar's was about CA$31 million.
Technical Analyst Clive Maund wrote in January it looked like the stock was set to "commence a major bull market as it just starts to advance out of a large low base pattern."
"After trending steadily higher for many months in a measured manner from this low and well into 2023, it reversed into an equally measured downtrend that brought it back to the Summer 2022 lows, with which it formed the second low of a Double Bottom last Fall, and we can also see that it then started to advance out of this low," Maund wrote.
The analyst said the price broke out "sharply and decisively" last November, a move that he believed to be the beginning of a new bull market for the stock.
Streetwise Ownership Overview*
Revolve Renewable Power Corp. (TSXV:REVV;OTCQB:REVVF)
"The conclusion is that all the technical factors described here are converging to indicate that Revolve Renewable Power Corp. is set to embark on a significant bull market advance from the current low level, which, although it has already started, is still in its very earliest stages," noted.
Ownership and Share Structure
About 60% of the company is owned by insiders and management, Revolve said.
Top shareholders include Joseph O'Farrell with 13.58%, Roger Norwich with 12.49%, the CEO and Director Stephen Dalton with 5.96%, President and Director Omar Bojoquez with 4.95%, and Jonathan Clare with 1.9%.
The rest is retail.
Revolve has a market cap of CA$18.28 million with 61.32 million shares outstanding and 36.36 million free-floating. It trades in a 52-week range of CA$0.71 and CA$0.20.
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Important Disclosures:
- Revolve Renewable Power Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Revolve Renewable Power Corp..
- Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- This article does not constitute investment advice and is not a solicitation for any 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. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.
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