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Is Loop Industries a buy? (January, 2025)

Following the release of the company’s third quarter results, Paradigm Capital analyst J. Marvin Wolff has maintained his “Buy” rating on Loop Industries (Loop Industries Stock Quote, Chart, News, Analysts, Financials NASDAQ:LOOP).

On January 14, LOOP, which is not yet commercial, reported its Q3, 2025 results. The company posted a loss of $12.1-million.

“The successful completion of our transaction with Reed Societe Generale Group marks a significant step towards our strategic goals,” CEO Daniel Solomita said. “This includes investing in low-cost manufacturing locations like India and licensing our technology to companies seeking solutions to the plastic waste crisis in higher-cost regions such as Europe. We are eager to collaborate closely with Reed Societe Generale Group to deliver our first European project.”

The analyst says the loss was larger than expected due to a non-cash impairment charge.

“Earnings came in at a loss of $12.1M or ($0.25/sh); we were expecting a loss of $5.1M or ($0.11/sh). The difference was a non-cash impairment charge of $8.5M for equipment installed to date at Ulsan. We note this equipment is new and will be deployed by Loop on other projects,” he wrote.

In a research update to clients January 15, Wolff maintained his “Buy” rating and price target of $5.80 on LOOP, implying a return of 423% at the time of publication.

The analyst thinks the company will post an EBITDA loss of $21.2-million in fiscal 2024. In 2027, he expects the company to begin commercialization and post EBITDA of positive $28.2-million on revenue of $85.7-million.

“Our current forecast is based on two Loop plants in the Loop-Ester Indian JV being online and the Reed/Loop European plant by FY29. Our FY29e EBITDA (with royalty) is $84.2M (unchanged) with debt of $135M. Shares outstanding remain at 66.5M. Using an 8x EV/EBITDA multiple and a 10% discount rate, we arrive at our target price of $5.80 (unchanged). With the strong support of Reed and Ester, Loop has demonstrated that it is very fundable, thus we maintain our Buy rating.”

What does Loop Industries do? (via Paradigm Capital).

Loop has developed a patented technology to supply CPG brand companies around the world with PET plastic and polyester fiber made from 100% recycled content. The patented technology breaks down waste PET into its base chemical building blocks, or monomers: dimethyl terephthalate (DMT) and monoethyleneglycol (MEG). The monomers are purified and then recombined into virgin-quality PET plastic and polyester fiber. The Ester Industries Ltd. JV to build a plant is signed and moving forward. The path to commercialization is at hand. Sufficient land is being assembled to build two plants in India.

Tagged with: LOOP
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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