New Era Helium, Inc. engages in the exploration, development, and production of helium, natural gas, and natural gas liquids in North America. It holds a portfolio of approximately 137,000 acres in Southeast New Mexico. The company is based in Midland, Texas.

New Era Helium, Inc.

Energy

The company does not pay dividends at all, or it pays them sporadically. There have only been a few years with dividend payments in the past ten years. 

The stock has been falling steadily in the past six months, losing 91% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 88ppts in total. At the same time, the stock's performance relative to its the peers from the same country and sector is different. It underperformed these peers by 85ppts over six months and grew 25ppts slower in the past month. With respect to the stock's valuation against its peers, its overall price performance is slightly negative.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -3174.8% in the last 12 months, a decline from -2222.7% in FY23. 

Historically, NEHC has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -3673.1%, down from -2586.9% in FY23. 

New Era Helium, Inc. reported a return on equity (RoE) of 1828.4% in the last 12 months, up from -2607.2% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -402.1%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -167.8% in the last 12 months, an increase from -186.7% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -109.8 in the past several years. This ratio implies a fragile shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

NEHC has very poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day. Liquidity is very unstable and becomes extremely unfavourable on the days with the lowest activity. The trading volume mostly stays the same even under highly turbulent market conditions. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to slow historical revenue growth, bleak profitability, negligible return on capital, poor working capital management, poor cash flow generation, and an unfavourable capital structure. We note low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, NEHC is exceptionally volatile. In other words, the stock will be among the worst-performers in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be critical. 

In normal market circumstances, NEHC is exceptionally volatile. Put differently, without outstanding market volatility or shocking company news, the stock's price will change quite unpredictably. The stock's losses on its worst days (less than 1-5% of the time) will range from critical to immense. 

From both historical and forecast perspectives, the stock is overpriced compared to similar stocks. 

New Era Helium, Inc.

$ 0.43

2

New Era Helium, Inc.

$ 0.43

2

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

$ 0.43

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