I think their gross margin on the gasifier is 30 to 35 percent. Which translates to 6.9 to 8 mil in revenue. Does this sound correct?
I am new to NRG and still doing my DD, but here is a concern just reading through their documents. It seems 2011 was supposed to be their breakout year, with a target price of $2.75/share, but:
"Uncertainty in project timing leads to lower ... 2011 forecast.
Alter is advancing 45 projects with 20 in the engineering stage. We are
confident in the pipeline, but uncertain when revenue will be recognize"
I guess it has taken them 2 years to finally get projects moving along, but these projects are so big, you will always have "uncertainty" as to when revenues will actually be recognized... and a delay in one or two projects could really disrupt revenue projections, which in turn can hurt the stock price. It will be like feast or famine :)
alternrg.com
Naturally as NRG gets several projects under its belt a steady stream of revenue will be generated from licenses and royalty agreements, but still it would be hard to forecast quarterly revenues. Because if you sign a project in one quarter, your revenue will be substantially higher than when you don't. Just being the devil's advocate here. How have things changed since 2011, that you feel this WILL finally be their breakout year?
Finally there was a poster on SH who raised concerns about their cash flow as more big projects come in. What do you think about his concern?
"Yeah, could be several deals. But -as they´ve stated- one of their key challenges appears 'balancing near term cashflow requirements with longer term value added activities'.
If you must go in 'advance performance'(?), execution takes a lot of time and (may)orders getting more and more and bigger -then you can get seeerious trouble. I`m facing this issue also with one of my stocks -it`s 'difficult'.
So this point should be on your all radar."
stockhouse.com
Thanks TSL for sharing your knowledge :) |
