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Pyrogenesis a Little Risky, Still a Speculative Buy says Versant’s Fiore

Montreal's Pyrogenesis designs systems that convert municipal and industrial waste into gasesous fuel. The company has landed recent high profile contracts with the US Navy and the US Air Force, where its plasma waste-to-energy system has been in operation at the Florida base since late last year

Montreal's Pyrogenesis designs systems that convert municipal and industrial waste into gasesous fuel. The company has landed recent high profile contracts with the US Navy and the US Air Force, where its plasma waste-to-energy system has been in operation at the Florida base since late last year
On Monday, PyroGenesis (TSXV:PYR) reported its fiscal 2011 results. Revenue for the year was down, dropping to $5.06-million from 2010’s $7.71-million. The bottom line was worse, too. The company lost $6.9-million in 2011 vs. a profit of $900,000 the year prior.

Versant analyst Massimo Fiore is bullish on the prospects for Pyrogenesis, but he sees a little more risk in the stock, short term. Fiore says the “lumpiness” of the company’s revenue caused by long sales cycles and the poor liquidity of its stock are particular concerns. In a research update to clients today, Fiore downgraded Pyrogenesis from “Buy” to “Speculative Buy” and lowered his twelve-month target price to $1.65.

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Founded in 1991, Pyrogenesis designs systems that convert municipal and industrial waste into gaseous fuel. The company has landed recent high profile contracts with the US Navy and the US Air Force, where its plasma waste-to-energy system has been in operation at the Florida base since late last year. Pyrogenisis merged with another publicly listed cleantech, Industrial Growth, last summer and went on to raise more than $7-million. But the newly formed company’s shares have been sliding since the merger, from a high of $1.90 last July, to nearly a third of that recently.

Fiore says that while the recent financing, which closed on March 29th, gave the company some breathing room, it also forced him to readjust his metrics because of the dilution that financing incurred. Nonetheless, Fiore believes Pyrogenesis “…holds best-in-class technology with a world class clientele…”

Shares of Pyrogenesis closed today even at $.62 cents.

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About The Author /

Nick Waddell
Cantech Letter founder and editor Nick Waddell has lived in five Canadian provinces and is proud of his country's often overlooked contributions to the world of science and technology. Waddell takes a regular shift on the Canadian media circuit, making appearances on CTV, CBC and BNN, and contributing to publications such as Canadian Business and Business Insider.

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