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1. Company Snapshot

1.a. Company Description

Loop Industries, Inc., a technology company, focuses on depolymerizing waste polyethylene terephthalate (PET) plastics and polyester fibers into base building blocks.It polymerized monomers into virgin-quality PET resins for use in food-grade plastic packaging, such as plastic bottles for water and carbonated soft drinks, and containers for food and other consumer products; and polyester fibers, including textiles, clothing, and apparel.The company was incorporated in 2010 and is based in Terrebonne, Canada.

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1.b. Last Insights on LOOP

Loop Industries, Inc.'s recent performance was driven by strategic leadership appointments and changes, positioning the company for commercialization of its technology. The promotion of Adel Essadam to Chief Operating Officer is a significant development, underscoring the company's commitment to operational excellence. Additionally, Loop's participation in the Gabelli Funds' 11th Annual Waste & Sustainability Symposium, where it will present and engage with institutional investors and financial analysts, is a positive indicator of its growing visibility and credibility in the industry.

1.c. Company Highlights

2. Loop Industries Shines with Steady Progress on Infinite Loop Facilities

Loop Industries reported a significant beat on EPS, with actual EPS coming in at $0.14, relative to estimates at -$0.09. The company's available liquidity stood at $12.3 million, with cash operating expenses reduced by 46% to $2.6 million. The company's revenue growth estimates for next year stand at 1051.6%, indicating a strong growth trajectory. According to Daniel Solomita, the company is focused on securing sufficient financing to fund Loop's equity contribution for India and operating cash burn through to the start-up of the Indian facility.

Publication Date: Jul -17

📋 Highlights
  • India Facility CapEx and Capacity: - Loop Industries confirmed a $176 million CapEx for the India facility, with a 154 million pounds per year capacity and a net CapEx per pound of $0.61.
  • Cost Reduction and Liquidity: - The company ended Q1 fiscal 2026 with $12.3 million in available liquidity and reduced cash operating expenses by 46% to $2.6 million.
  • Modularization and CapEx Reduction: - Loop's technology allows for modularization, reducing CapEx by 50%, with modules built in India and shipped to Europe.
  • Customer Contracts and Financing: - The company is in discussions with customers for long-term contracts with pricing fixed for 3-5 years, and aims to secure sufficient financing to fund its equity contribution for India and operating cash burn.

Financial Performance

The company's financial performance was marked by a significant reduction in cash operating expenses, which declined by 46% to $2.6 million. The company's available liquidity stood at $12.3 million, providing a cushion for future growth. The EPS beat was largely driven by the company's cost-cutting measures and progress on its Infinite Loop facilities.

Operational Highlights

The company made significant progress on its Infinite Loop manufacturing facilities in India and Europe. The India facility will have a 154 million pounds per year capacity, with a net CapEx per pound of $0.61, excluding financing costs, land costs, and polymerization. The company confirmed a $176 million CapEx for the India facility, which is expected to be operational by the end of 2027. The company is offering a textile-to-textile solution, recycling waste textiles into brand-new polyester fiber, and is in discussions with leading global apparel brands and CPG brands.

Valuation and Outlook

At current levels, Loop Industries trades at a P/E Ratio of -4.08, a P/B Ratio of 167.27, and a P/S Ratio of 5.65. The EV/EBITDA multiple stands at -2.56, indicating that the stock may be undervalued. However, the company's ROE stands at -793.94%, indicating significant losses. The company's valuation multiples suggest that the stock is highly speculative, and investors are betting on the company's growth prospects.

Growth Strategy

The company is focused on modularization, with modules built in India and shipped to Europe, reducing CapEx by 50%. The company is also in discussions with customers for long-term contracts, with pricing fixed for 3-5 years, providing predictability for customers. The company has customer contracts with take-or-pay elements, where customers must pay a penalty if they don't accept the material, ranging from 40% to 100% of the contract.

3. NewsRoom

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Loop Industries Executes a Multi-Year Offtake Agreement With Nike, the Global Leader in Athletic Footwear and Apparel

Nov -10

Source: accessnewswire.com

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Loop Industries, Inc. (LOOP) Q2 2026 Earnings Call Transcript

Oct -16

Source: seekingalpha.com

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Loop Industries Reports Second Quarter Fiscal 2026 Results and Provides Update on Positive Progress Towards Commercialization

Oct -15

Source: accessnewswire.com

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Loop Industries Announces Offtake Agreement with Taro Plast to Supply Loop Dimethyl Terephthalate (DMT) Made From 100% Recycled Content

Sep -16

Source: accessnewswire.com

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Loop Industries and Hyosung TNC Launch Strategic Alliance to Support Shift by Global Brands to Circular Polyester

Sep -11

Source: accessnewswire.com

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Loop Industries and Shinkong Launch Strategic Alliance to Support Shift By Global Brands to Circular Polyester

Aug -14

Source: accessnewswire.com

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Loop Industries' India Joint Venture Reaches Agreement to Acquire Strategic Site in Gujarat, India, for Infinite Loop Manufacturing Facility

Aug -13

Source: accessnewswire.com

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Loop Industries Announces Launch of Twist(TM), its High-Performance Polyester Resin Brand for Textile and Apparel Customers

Jul -30

Source: accessnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (0.00%)

6. Segments

Polyethylene Terephthalate Plastic and Polyester Fiber

Expected Growth: 7.5%

Growing demand for sustainable textiles, increasing adoption of recycled PET fibers in apparel industry, and rising environmental concerns drive the growth of polyester fiber market.

7. Detailed Products

PET (Polyethylene Terephthalate) Upcycled Plastic

Loop Industries, Inc. offers a sustainable and eco-friendly PET upcycled plastic, which is produced from 100% recycled PET plastic waste, reducing the need for virgin plastic and minimizing waste.

rPET (Recycled Polyethylene Terephthalate)

Loop Industries, Inc. produces high-quality rPET, which is used to manufacture a wide range of products, including packaging materials, textiles, and automotive parts.

PET Depolymerization Technology

Loop Industries, Inc. has developed a proprietary PET depolymerization technology, which breaks down PET plastic waste into its raw materials, allowing for the production of high-quality, upcycled PET plastic.

8. Loop Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Loop Industries, Inc. faces moderate threat from substitutes due to the availability of alternative sustainable packaging solutions.

Bargaining Power Of Customers

Loop Industries, Inc. has a diverse customer base, which reduces the bargaining power of individual customers.

Bargaining Power Of Suppliers

Loop Industries, Inc. relies on a few key suppliers for raw materials, giving them moderate bargaining power.

Threat Of New Entrants

The sustainable packaging industry is attractive, and new entrants may pose a significant threat to Loop Industries, Inc.'s market share.

Intensity Of Rivalry

The sustainable packaging industry is highly competitive, with many established players, leading to a high intensity of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 8.92%
Debt Cost 3.95%
Equity Weight 91.08%
Equity Cost 11.01%
WACC 10.38%
Leverage 9.79%

11. Quality Control: Loop Industries, Inc. passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Loop Industries

A-Score: 3.9/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1.09$

Current Price

1.09$

Potential

-0.00%

Expected Cash-Flows