11Mês·

Q3 results look positive

$NRGV (-2,37%) has published figures. Loss/share fell from USD 0.18 to USD 0.16. Sales increased by 2,676.7%!!! to 33.3 million compared to the same quarter last year.

In addition, 1.8 GW with EU Green Energy Sign Framework. Deal pipeline looks good. I am very optimistic here in the long term.

What do the experts think?

@Tenbagger2024
@EpsEra

1 Comentar

Keineui@Keineui

11Mês

GPT says the following:

The report paints a very dynamic and predominantly positive picture. The company is clearly in a decisive phase of transformation and growth.
Opportunities
Based on the report, I see the following major opportunities for Energy Vault in particular:
Strategic transformation to recurring revenue: The most important point is the introduction and expansion of the "Asset Vault" strategy. This will transform Energy Vault from a pure project developer and technology vendor to a "Build, Own, Operate" company. This creates long-term, predictable and high-margin sources of income (tolling models) instead of one-off sales revenue. Such recurring revenues are generally valued significantly higher by investors. The USD 300 million financing by OIC for this model is a strong validation of this strategy by the capital market.
Strong growth & backlog: A backlog of USD 920 million, which has more than doubled since the beginning of the year, is an extremely strong signal of market acceptance of the technology and services. The year-on-year sales growth (27x) is impressive, even if it comes from a low base. This shows that the company is now in a position to implement and monetize projects on a significant scale.
Improved profitability and cash position: Although the company is still loss-making, the adjusted EBITDA loss has reduced by 59%. Even more important is the forecast to increase the cash position to 75-100 million US dollars by the end of the year. At a time when many growth companies are burning cash, the ability to increase cash is a sign of operational skill and financial discipline.
Expansion into new markets and segments: The agreement with EU Green Energy opens up the European market on a large scale (1.8 GWh). The cooperation with Crusoe to supply energy to AI data centers is strategically brilliant as it links Energy Vault directly to one of the fastest growing sectors of the global economy, which has enormous energy needs.
Risks
Despite the positive development, there are naturally also risks:
Execution Risk: A large order backlog is an opportunity, but also a liability. Energy Vault must now prove that it can implement this large number of projects in different regions on time, on budget and with the promised quality. The "Own & Operate" model adds to the operational complexity. Any delays or cost overruns could have a negative impact on margins.
Profitability and cash flow: The company continues to post a significant net loss on a GAAP basis (USD 26.8m in the quarter). While the cash forecast is positive, the business remains extremely capital intensive. The reliance on external financing such as the recently drawn credit facility (YA II PN) demonstrates that liquidity remains a key issue.
Market dependency and regulatory uncertainties: The success of energy storage projects depends heavily on electricity market prices, grid volatility and government incentives (such as the US Investment Tax Credit, ITC). A change in these framework conditions could affect the profitability of future projects. The comment that a project in Albania is still subject to "final legislative approval" is a good example of this risk.
Competitive pressure: The market for energy storage solutions is growing rapidly and attracting many competitors. Energy Vault must continuously defend and expand its technological and operational advantages in order to maintain its margins.
Forecast for a fair valuation
An accurate valuation is complex and should always be performed by a qualified financial advisor. However, I can give you a methodology for how the market might arrive at a valuation based on this report.
The key metric that the company itself focuses on is the long-term recurring adjusted EBITDA from the asset vault. The report provides a clear forecast here:
USD 100-150 million recurring adjusted EBITDA by the end of 2029 from the first fund alone.
This is the anchor point for a forward-looking valuation. Instead of valuing the company based only on its current (negative) results, the market will try to value this future earnings stream.
A hypothetical valuation model could look like this:
Assuming future EBITDA: let's take the midpoint of the 2029 forecast, i.e. USD 125 million.
Applying a multiplier: Now comes the crucial step. Which multiplier to apply to this future EBITDA? Since Energy Vault is developing into a company with stable, contractually secured, recurring revenues (similar to an infrastructure operator or utility), higher multiples are justified here than for a pure project developer. A multiple in the range of 10x to 15x EBITDA is a plausible assumption for a fast-growing company in this sector.
Calculation of the future enterprise value:
Lower end: USD 125 million * 10 = USD 1.25 billion
Upper end: USD 125 million * 15 = USD 1.875 billion This would be the estimated enterprise value in 2029.
Discounting to today's value: A value in 2029 is not the same as a value today. We need to discount this future value to today in order to determine today's fair value. For a growth company with corresponding risks, a discount rate of 12%, for example, would be appropriate. Over a period of 4 years (from the end of 2025 to the end of 2029), this results in
Current value (lower end): USD 1.25 billion / (1.12)^4 ≈ USD 794 million
Current value (upper end): USD 1.875 billion / (1.12)^4 ≈ USD 1.19 billion
Adjustment for net debt: This calculated value is the enterprise value. To arrive at the value for shareholders (market capitalization), we would have to deduct the net debt. According to the balance sheet, debt (current and non-current) amounts to around USD 60.2 million and cash and cash equivalents to USD 61.9 million. The company therefore has virtually no net debt. Therefore, the enterprise value in this case corresponds approximately to the market capitalization.

Summary forecast for the valuation
Based solely on the projected earnings power of the "Asset Vault Fund 1", a fair market capitalization for Energy Vault today could be in the range of approximately USD 800 million to USD 1.2 billion.

Important caveats:
This model is highly simplified and depends on the assumption that the company actually achieves its 2029 targets.
It only values the first "Asset Vault" fund. Future funds or income from the traditional project business are not priced in here and represent additional upside potential.
The market always values a mixture of current reality (still losses) and future hope. An investment in Energy Vault at the present time is therefore a clear bet on the successful implementation of the "Own & Operate" strategy.
To summarize, the report shows a company that is setting the right strategic course. If the management successfully implements the announced projects and further improves profitability, there is considerable valuation potential. The main risk is and remains the operational implementation in the coming years.

That would be an upside of 33% as of today. I find this plausible

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