Sustainable Green Team, Ltd., through its subsidiaries, provides storm/disaster recovery services. It offers tree, debris hauling and removal, and biomass recycling services. The company also manufactures, packages, and sells mulch to landscapers, installers, and garden centers. It serves governmental, residential, and commercial customers. The company was formerly known as National Storm Recovery Inc. and changed its name to Sustainable Green Team, Ltd. in July 2020. Sustainable Green Team, Ltd. is based in Apopka, Florida.

Sustainable Green Team, Ltd.

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. 

SGTM reported revenue of USD 5mn in the last 12 months, down 82% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 292% from FY23 to USD -0.19.

Over the last six months, the stock performance has varied, with an increase following a drop. The stock's price trend wasn't definitive when matched against its global counterparts from the same sector and industry (as depicted above). Within the past six months, its performance has trailed this peer group's by 73ppts and its growth decelerated by 8ppts in the past month. This is equally valid for peers from the same country and industry. Given the stock's valuation versus its peers, its total price movement is slightly unfavourable.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -236.8% in the last 12 months, a decline from 21.9% in FY23. 

Historically, SGTM has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -404.3%, down from -12.1% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to -13.3% in the last 12 months, a decrease from -2.6% in FY23. 

In the last 12 months, the return on capital employed (RoCE) declined to -24.5%, below the peers. 

Sustainable Green Team, Ltd. reported a return on equity (RoE) of -24.5% in the last 12 months, down from -4.4% in FY23. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.5 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.

SGTM 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. 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, inadequate interest coverage, and poor cash flow generation. We note low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, SGTM 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, SGTM 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 moderately underpriced compared to similar stocks. 

Sustainable Green Team, Ltd.

$ 0.07

3

Sustainable Green Team, Ltd.

$ 0.07

3

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Profitability factor

Risk / Profitability

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Profitability factor

$ 0.07

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