Zeo Energy Corp. (NASDAQ: ZEO)

Sector: Technology Industry: Solar CIK: 0001865506
Market Cap 44.22 Mn
P/B -25.69
P/E -1.59
P/S 0.64
ROIC (Qtr) 75.53
Div Yield % 0.00
Rev 1y % (Qtr) 21.56
Total Debt (Qtr) 4.12 Mn
Debt/Equity (Qtr) -2.40
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About

Zeo Energy Corp., known by its ticker symbol ZEO, is a company that operates within the energy industry, specifically in the renewable energy sector. Zeo's primary business activities encompass the development, installation, and maintenance of solar energy systems, along with the provision of energy storage solutions. The company is active in the solar energy systems and energy storage solutions markets, contributing to the global shift towards sustainable energy sources. Zeo Energy Corp. generates revenue mainly through the sale of solar energy...

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Investment thesis

Bull case

  • Strong tangible asset base of 31.41M provides 7.61x coverage of total debt 4.12M, indicating robust asset backing and low credit risk.
  • Tangible assets of 31.41M provide exceptional 25.12x coverage of deferred revenue 1.25M, showing strong service capability backing.
  • Operating cash flow of (7.66M) fully covers other non-current liabilities (492845) by 15.54x, showing strong long-term stability.
  • Tangible assets of 31.41M provide robust 7.67x coverage of other current liabilities 4.09M, indicating strong asset backing.
  • Retained earnings of (61.81M) represent substantial 35.91x of equity (1.72M), indicating strong internal capital generation.

Bear case

  • Operating cash flow of (7.66M) barely covers its investment activities of 6.46M, with a coverage ratio of -1.18, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 3.92M provide limited coverage of acquisition spending of 7.60M, which is 0.52x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of (7.66M) provides insufficient coverage of deferred revenue obligations of 1.25M, which is -6.13x, raising concerns about future service delivery capabilities.
  • High receivables of 14.38M relative to inventory of 934871 (15.39 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • The company's operating cash flow of (7.66M) shows concerning coverage of stock compensation expenses of 6.92M, with a -1.11 ratio indicating potential earnings quality issues.

Peer comparison

Companies in the Solar
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 FSLR First Solar, Inc. 24.22 Bn 17.30 4.80 0.55 Bn
2 NXT Nextpower Inc. 18.09 Bn 30.50 5.02 0.00 Bn
3 ENPH Enphase Energy, Inc. 6.00 Bn 34.84 4.07 1.20 Bn
4 RUN Sunrun Inc. 4.28 Bn -1.73 1.85 14.69 Bn
5 SEDG Solaredge Technologies, Inc. 2.16 Bn -3.68 2.12 0.40 Bn
6 SHLS Shoals Technologies Group, Inc. 1.87 Bn 56.32 4.32 0.17 Bn
7 ARRY Array Technologies, Inc. 1.73 Bn -18.82 1.30 0.68 Bn
8 JKS JinkoSolar Holding Co., Ltd. 1.37 Bn -2.86 0.14 6.93 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.83 1.41
EV to Cash from Ops. EV/CFO -6.37 3.45
EV to Debt EV to Debt 11.83 6.34
EV to EBIT EV/EBIT -1.75 22.16
EV to EBITDA EV/EBITDA -6.90 5.58
EV to Free Cash Flow [EV/FCF] EV/FCF -5.55 9.74
EV to Market Cap EV to Market Cap 1.10 2.40
EV to Revenue EV/Rev 0.70 312.86
Price to Book Value [P/B] P/B -25.69 0.12
Price to Earnings [P/E] P/E -1.59 -3.59
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 -9.53
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 0.00
Dividend per Basic Share Div per Share (Qtr) 0.00 0.00
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 0.00
Interest Coverage Int. cover (Qtr) -165.12 -54.67
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 2.27 -54.29
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -9.56 50.84
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.00
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -239.53 3.75
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 17.26 -309.44
EBIT Growth (1y) % EBIT 1y % (Qtr) -234.72 -42.85
EBT Growth (1y) % EBT 1y % (Qtr) -223.50 -48.74
EPS Growth (1y) % EPS 1y % (Qtr) -118.61 -74.61
FCF Growth (1y) % FCF 1y % (Qtr) -24.94 4.39
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 9.56 701.13
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.19 0.65
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.00
Cash Ratio Cash Ratio (Qtr) 0.36 0.39
Current Ratio Curr Ratio (Qtr) 2.19 1.43
Debt to Equity Ratio Debt/Equity (Qtr) -2.40 0.31
Interest Cover Ratio Int Coverage (Qtr) -165.12 -54.67
Times Interest Earned Times Interest Earned (Qtr) -165.12 -54.67
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) -22.40 -907.38
EBIT Margin % EBIT Margin % (Qtr) -40.26 -994.26
EBT Margin % EBT Margin % (Qtr) -40.50 -1,508.47
Gross Margin % Gross Margin % (Qtr) 57.70 10.82
Net Profit Margin % Net Margin % (Qtr) -40.00 -1,462.08