Genie Energy Q4: Cheap Valuation, But Capital Allocation Will Be Key

Sandeep Nital David
481 Followers
(7min)

Summary

  • Full year 2024 results came in at the high end of guidance, with the outlook for 2025 calling for earnings to largely remain stable.
  • Net cash on the balance sheet represents nearly half the current market cap.
  • While there are inherent risks related to the retail energy business, I believe the low valuation multiple is driven by uncertainty around capital allocation.
  • I am maintaining my Buy rating on the stock.

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Investment thesis

Q4 results for Genie Energy (NYSE:GNE) showed Adjusted EBITDA of $48.5 million for FY24, which was closer to the upper end of management's guidance range. The company generated strong FCF, with net cash on

This article was written by

481 Followers
An individual investor primarily focused on undercovered companies, with more than 50 companies on my watchlist. My areas include technology, software, electronics and the energy transition. I have been investing my personal capital for over 7 years in a broad range of companies globally. Through my years of analyzing countless companies, I have accumulated professional investment experience within my circle of competence. I have a Masters degree in Electrical Engineering and currently work as an automotive battery RnD engineer in Sweden. My write-ups on SA are a good way for me to layout my investment thesis on companies and receive feedback from the broader investing community. I enjoy diligently studying and researching small to mid cap companies which are often researched to a lesser extent by others. Through my analysis of numerous companies, I seek to identify asymmetric investment opportunities with the goal of achieving market beating returns.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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