Greenlane (TSX: GRN) is skyrocketing: A dirt-cheap clean stock to buy?

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Greenlane (TSX: GRN) is skyrocketing: A dirt-cheap clean stock to buy?

Greenlane (TSX: GRN) is skyrocketing: A dirt-cheap clean stock to buy?
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Highlights

  • Greenlane (TSX: GRN) stocks were trading over 10 per cent higher on Monday noon, May 30.
  • The clean tech company announced that it has received a contract for renewable natural gas (RNG) project in the US.
  • Greenlane reported a 33 per cent year-over-year (YoY) revenue surge in Q1 FY2022.

Greenlane Renewables (TSX: GRN) stock has been trending hot on the markets, trading over 10 per cent higher at C$ 0.86 on Monday noon, May 30. This price spike in GRN stocks came as the TSX-listed industrial company announced that it has received a contract for renewable natural gas (RNG) project in the US.

Greenlane Renewables did not specify the name of this entity, but it said that an international energy company has awarded a contract of C$ 8.7 million to its 100 per cent owned subsidiary, Greenlane Biogas North America Ltd. The Canadian company also revealed that this development marks the third contract win from this customer within 18 months.

Demand for renewable natural gas could grow significantly with the growing efforts to decarbonize the global energy systems. Keeping this in mind, let us look at Greenlane Renewables’ performance.

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Greenlane Renewables Inc (TSX: GRN) Q1 FY2022 results

Greenlane Renewables reported revenue of C$ 16.3 million in Q1 FY2022, which was 33 per cent higher than that of C$ 12.2 million in Q1 2021.

However, the C$ 126-million market cap company posted a gross profit of C$ 3.6 million in the latest quarter, which was lower than that of C$ 4 million in Q1 2021.

The renewable gas producer said that its net loss before tax amounted to C$ 2.15 million in Q1 2022 against C$ 0.23 million a year earlier.

The industrial company’s sales order backlog was C$ 35.7 million at the end of Q1 2022. As of March 31, 2022, Greenlane Renewables recorded C$ 23.1 million in cash and cash equivalents (CCE).

Greenlane Renewables (TSX: GRN)’s Q1 FY2022 results

Greenlane Renewables stock performance

GRN stock slipped by almost 46 per cent in the last one year. However, the renewable gas stock grew by nearly 22 per cent since May 24, when it fell to a 52-week low of C$ 0.69.

GRN’s Relative Strength Index (RSI) appears to have strengthened in the last few days, standing at 50.41 as on May 30, as per Refinitiv. The debt-to-equity (D/E) ratio of 0.03 reflects that Greenlane Renewables primarily finances from equity.

Bottomline

In Q1 FY2022, Greenlane Renewables acquired Airdep, a biogas desulfurization and air deodorization company in Vicenza. The Canadian company believes that the increased focus on decarbonization and the Ukraine crisis could boost renewable natural gas production.

Please note, the above content constitutes a very preliminary observation based on the industry, and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks. 

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