Loop Industries (NASDAQ: LOOP), a key player in the Basic Materials sector and Commodity Chemicals industry, has recently experienced a significant surge in its stock price. This surge warrants a closer look at the company's
fundamental indicators to assess its stability. Loop Industries, with a current ratio of 4.53X, exhibits a strong ability to meet its short-term obligations. Despite this, the company reported a loss in EBITDA of $26.7M and a significant retained earnings deficit of
$155.9M. The company's total operating expenses stood at $38.3M, and it had a negative cash flow from operating activities of $34.9M. With an enterprise value to revenue ratio of 733.8918 and a price to earnings ratio of 479.50X, the stock appears to be significantly overvalued. The company's net tangible assets stand at $32.5M, and it has a price to book ratio of 4.11X. Despite these challenges, Loop Industries has managed to maintain a healthy cash position of $29.6M. At present, Loop Industries' Book Value per Share remains relatively stable compared to the previous year. As of October 16, 2023, the Current Ratio is projected to increase to 13.86, while the Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA) are expected to rise to $16.9 million. Loop Industries is set to announce its earnings today, with the next financial report anticipated on January 11, 2024.
While some conservative investors may be steering clear of the chemicals sector, we will delve deeper into Loop Industries to discuss its current market opportunities. We will explore why this could be a significantly better year for Loop Industries' shareholders. Currently, the probability of financial distress for Loop Industries is less than 2 percent. The question remains: will retail investors maintain their optimism, or should we anticipate a sell-off?
Typically, a company's
financial statements are the reports that show the
financial position of the company. There are three main documents that fall into the category of financial statements. These documents include Loop Industries income statement, its balance sheet, and the statement of cash flows. Potential Loop Industries investors and stakeholders use financial statements to determine how well the company is positioned to perform in the future. Although Loop Industries investors may use each financial statement separately, they are all related. The changes in Loop Industries's assets and liabilities, for example, are also reflected in the revenues and expenses that we see on Loop Industries's income statement, which results in the company's gains or losses. Cash flows can provide more information regarding cash listed on a balance sheet, but not equivalent to net income shown on the income statement. Please read more on our
technical analysis and
fundamental analysis pages.
The goal of Loop Industries
fundamental analysis is to do accurate financial forecasts. There are several possible objectives to fundamental analysis, such as projecting of Loop Industries performance into the future periods or doing a reasonable stock valuation. The intrinsic value of Loop Industries shares is the value that is considered the true value of the share. If
the intrinsic value of Loop is higher than its market price, buying is generally recommended. If it is equal to the market price, it is recommended to hold; and if it is less than the market price, then one should sell all shares Loop Industries. Please read more on our
fundamental analysis page.
How effective is Loop Industries in utilizing its assets?
Loop Industries reports assets on its Balance Sheet. It represents the amount of Loop resources that either has an existing economic value or will provide some form of benefits in the future. By effectively utilizing its assets, Loop Industries aims to generate revenue, control costs, drive operational efficiency, and enhance profitability. Optimizing asset utilization helps maximize shareholder value and maintain a competitive position in the Commodity Chemicals space. To get a better handle on how balance sheet or income statements item affect Loop volatility, please check the breakdown of all its
fundamentals.
Are Loop Industries Earnings Expected to grow?
The
future earnings power of Loop Industries involves the interaction of many company-specific, industry, and economic forces. Earnings estimates embody investors' opinions of Loop Industries factors such as sales growth, product demand, competitive industry environment, profit margins, and cost controls. Loop Industries
stock prices adjust as these expectations change or are proven wrong. The main thing to remember is that equities with high expected earnings growth tend to underperform the market because it is usually difficult to meet the market's high expectations. Companies with low earnings expectations tend to do better than expected. Please use our latest analysis of Loop
expected earnings.
Loop Industries Gross Profit
Loop Industries Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Loop Industries previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Loop Industries Gross Profit growth over the last 10 years. Please check Loop Industries'
gross profit and other
fundamental indicators for more details.
A Deeper look at Loop
Although in the United States, the Securities and Exchange Commission has enforced strong rules to prevent insiders from engaging in insider trading, finding insiders among active shareholders of Loop Industries is not uncomon. Institutional investors typically avoid acquiring a high percentage of Loop Industries stocks because performing such an act may violate securities laws. They are usually not investing their own money, but rather making investments on behalf of their clients. Let's take a look at how the ownership of Loop is distributed among investors.
Ownership Allocation
Loop Industries maintains a total of fourty-seven million five hundred twenty-one thousand two hundred
outstanding shares. Loop Industries secures majority of its outstanding shares owned by
insiders. An
insider is usually defined as a corporate executive, director, member of the board or
institutional investor who own at least 10% of the company's outstanding shares. 60.079 % of Loop Industries
outstanding shares that are owned by
insiders conveys that they have been buying or selling the stock in recent months in anticipation of some upcoming event. Please note that no matter how much assets the company has, if the real value of the firm is less than the current market value, you may not be able to make money on it.
| Retail Investors33.22% | Insiders60.08% | Institutions6.7% |
| Retail Investors | 33.22 |
| Insiders | 60.08 |
| Institutions | 6.7 |
Asset Utilization
The asset utilization indicator refers to the revenue earned for every dollar of assets a company currently reports. Loop Industries has an asset utilization ratio of 0.43 percent. This connotes that the company is making $0.004261 for each dollar of assets. An increasing asset utilization means that Loop Industries is more efficient with each dollar of assets it utilizes for everyday operations.
| Current Assets | 37.34 Million | 81.97 |
| Assets Non Current | 6.55 Million | 14.38 |
| Goodwill | 743,612 | 1.63 |
| Tax Assets | 915,549 | 2.01 |
Loop Industries (NASDAQ: LOOP), a player in the Specialty Chemicals industry, has recently seen a surge in its stock price, which necessitates a closer look at its fundamental indicators. Despite the firm's total debt being relatively low at **$3.3M**, it reported a significant operating income loss of $38.1M, with total operating expenses reaching $38.3M. Its EBIT also reflects this loss. Furthermore, Loop's net income from continuing operations shows a loss of $21.3M, suggesting a negative
financial performance. The company's cash flow situation is also concerning. Although it began the period with a cash flow of $44.1M, there was a drastic change in cash to -$13.5M, resulting in an end period cash flow of $30.6M. This indicates a substantial outflow of resources. On the positive side, Loop's net tangible assets stand at $32.5M and its net working capital at $32.8M, which could provide some financial stability. The company's Beta of 1.41 suggests a higher risk and return potential compared to the market. However, the probability of bankruptcy is listed at 1.00%, which, although low, cannot be ignored. Investors should proceed with caution, considering the company's financial indicators and recent price surge.
Analysis of Loop Industries
Loop Industries' stock is currently showing a downside variance of 10.04, which could potentially indicate a decrease in volatility. This reduction in downside risk might offer a more stable investment opportunity for those considering the stock. However, investors should remain alert as market conditions can change quickly, and past performance does not always predict future results. As always, maintaining a balanced portfolio and conducting thorough research are crucial for successful investing. As of October 16, 2023, Loop Industries has a Risk Adjusted Performance of 0.045, a downside deviation of 3.17, and a Mean Deviation of 3.05. In relation to fundamental indicators, the
technical analysis model allows you to examine the existing technical drivers of Loop Industries, as well as their interrelationships. In theory, you can use this information to determine if the company will mirror its model of past prices, or if the prices will eventually revert. We were able to analyze and interpolate data for nineteen technical drivers for Loop Industries, which can be compared to its industry peers.
Please verify Loop Industries' standard deviation, maximum drawdown, and the relationship between the Maximum Drawdown and expected shortfall to decide if Loop Industries is priced accurately, assuming the market reflects its recent price of 3.44 per share. Given that Loop Industries has a Jensen Alpha of 0.2425, we recommend you to check Loop Industries' recent market performance to ensure the company can sustain itself in the future. Despite Loop Industries' recent slump of more than -2 percent, the company still holds a strong potential for future growth. The company's valuation hype value stands at
3.48, slightly higher than its market value of
3.44, indicating a positive market sentiment. Moreover, the analyst overall consensus is a 'Strong Buy', with the target price estimated value at $6, which suggests a promising upside potential. However, investors should be aware of the company's EPS estimate for the next year, which is projected to be -0.35. Therefore, while the short-term outlook may seem bleak, the long-term potential of Loop Industries remains strong, making it a viable investment option for risk-tolerant investors seeking growth opportunities. .
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Gabriel Shpitalnik is a Member of Macroaxis Editorial Board. Gabriel is a young entrepreneur and writes predominantly on the business, technology, and finance sector. He likes to analyze different equity instruments across a wide range of industries focusing primarily on consumer products and evolving technologies.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Gabriel Shpitalnik do not own shares of Loop Industries. Please refer to our
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