NEXE Innovations Inc. designs, develops, manufactures, and sells plant-based single-serve coffee pods for use in single-serve coffee machines. The company was founded in 2015 and is headquartered in Surrey, Canada.

Canada

NEXE Innovations Inc.

Basic Materials

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. 

NEXE.V reported revenue of CAD 0mn in the last 12 months, up 146% from FY24. The dynamics of cash flow, as measure by free cash flow (FCF), were rather similar. EPS grew 28% from FY24 to CAD -0.03. Market expects EPS to reach CAD 0.00 in FY25.

The stock has been falling steadily in the past six months, losing 49% in total. The stock has lagged its global peers from the same sector and industry (as shown above), underperforming then by 37ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is neutral.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -437.8% in the last 12 months, a decline from -309.2% in FY24. 

Historically, NEXE.V has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -1138.0%, a growth from -2194.2% in FY24. 

In the last 12 months, the return on capital employed (RoCE) declined to -8.5%, below the peers. The consensus estimate for FY25 for RoCE is 0.0%, again behind the peers. 

NEXE Innovations Inc. reported a return on equity (RoE) of -8.5% in the last 12 months, down from -6.3% in FY24. The market consensus projects an RoE of 0.0% in FY25, again behind its peers. 

Another important profitability metric, return on assets (RoA), amounted to -7.8% in the last 12 months, a decrease from -5.8% in FY24. The market analysts predict that RoA will be 0.0% in FY25, again weaker than its peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.7 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.

NEXE.V has very poor trading liquidity. It will take considerable time for the average private investor to sell a common position under normal market conditions. Liquidity is relatively stable and becomes extremely unfavourable on the days with the lowest activity. However, under highly turbulent market conditions, the trading volume tends to improve significantly. 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 weak positions in its industry, bleak profitability, negligible return on capital, weak debt servicing capacity, inadequate interest coverage, and poor cash flow generation. We note resilient historical revenue growth, low margin volatility, and an favourable capital structure, among the positive credit factors. 

In highly turbulent market conditions, NEXE.V 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, NEXE.V 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 fairly priced compared to similar stocks. 

NEXE Innovations Inc.

CA$ 0.21

2

NEXE Innovations Inc.

CA$ 0.21

2

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Profitability factor

Risk / Profitability

Risk factor

Profitability factor

CA$ 0.21

About

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