Teralight, Ltd engages in the production of solar power in Israel. The company was incorporated in 2021 and is based in Ramat Gan, Israel.

Israel

Tera Light Ltd

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. 

TRLT.TA reported revenue of ILS 57mn in the last 12 months, down 28% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 120% from FY23 to ILS -0.39.

The stock's performance has been mixed in the past six months, with growth following a decline. There is no clear price trend compared to its global peers from the same sector and industry (as shown above). The stock has outperformed this peer group by 57ppts over past six months and grown 3ppts faster in the past month. 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 'fair'.

The company has reported very poor EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -3.4% in the last 12 months, up from -25.1% in FY22. 

Historically, TRLT.TA has reported very poor net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -45.5%, down from -14.8% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -3.2%, below the peers. 

Another important profitability metric, return on assets (RoA), amounted to -2.8% in the last 12 months, a decrease from -1.5% in FY22. 

Tera Light Ltd reported a return on equity (RoE) of -7.3% in the last 12 months, down from -2.4% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been -0.6 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.

TRLT.TA has average trading liquidity. The average private investor can sell his common position in the stock almost immediately. Liquidity is unstable and remains favourable 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 small 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, poor working capital management, and inadequate interest coverage. We note resilient historical revenue growth and low margin volatility, among the positive credit factors. 

In highly turbulent market conditions, TRLT.TA is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, TRLT.TA is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. We would also like to highlight the negligible intraday volatility of the instrument. 

Based on key historical and expected multiples, the stock is greatly undervalued relative to its peers. 

Tera Light Ltd

ILA 902.8

5

Tera Light Ltd

ILA 902.8

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 902.8

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