Zeo Energy Corp. provides residential solar, distributed energy, and energy efficiency solutions with focus on growth markets. Zeo Energy Corp. was founded in 2005 and is based in New Port Richey, Florida.

Zeo Energy Corp.

Technology

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. 

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 26ppts and its growth decelerated by 18ppts 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 neither favourable nor unfavourable.

The company has reported weak EBITDA margins compared to its global peers in recent years. EBITDA margin amounted to -6.8% in the last 12 months, a decline from 8.9% in FY22. 

Historically, ZEO has reported good net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled -2.6%, down from 16.6% in FY22. 

In the last 12 months, the return on capital employed (RoCE) declined to -1.4%, below the peers. 

Zeo Energy Corp. reported a return on equity (RoE) of -1.5% in the last 12 months, down from 5.2% in FY22. 

Another important profitability metric, return on assets (RoA), amounted to -1.3% in the last 12 months, a decrease from 5.0% in FY22. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 0.4 in the past several years. This ratio implies a weak 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.

ZEO has very poor trading liquidity. The average private investor can sell his common position in the stock almost immediately. 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 very small market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is moderate. We note resilient historical revenue growth, low margin volatility, strong debt servicing capacity, adequate interest coverage, and an favourable capital structure, among the positive credit factors. Among the negative credit factors, we point to bleak profitability, negligible return on capital, and poor working capital management.

In highly turbulent market conditions, ZEO 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, ZEO 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 slightly overpriced compared to similar stocks. 

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Zeo Energy Corp.

$ 2.49

2

Zeo Energy Corp.

$ 2.49

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 2.49

About

About

Zeo Energy Corp.

$ 2.49

2

Zeo Energy Corp.

$ 2.49

2

Risk factor

Profitability factor

Risk / Profitability

About

About

Risk factor

Profitability factor

$ 2.49

About

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