Is 5N Plus stock too risky?

Ventum Capital Markets analyst Amr Ezzat maintained a “Buy” rating and C$11.00 target on 5N Plus (5N Plus Stock Quote, Chart, News, Analysts, Financials TSX:VNP), warning in a June 17 note that proposed U.S. policy changes could shift the timing of clean energy investment without altering long-term fundamentals.

A Senate budget bill would phase out key solar tax credits earlier than expected, potentially affecting demand for critical materials. However, exemptions for minerals like cadmium telluride, central to 5N Plus’s work with First Solar, may soften the impact.

5N Plus makes high-purity specialty materials used in solar, space, medical imaging, and pharmaceutical applications.

“The risk to 5N Plus lies not in contract attrition but in the prospect of a volume plateau as tax credit economics weaken post-2026,” Ezzat said. “While First Solar’s backlog is secured into 2026 and could benefit from near-term pull-forward activity, the phasedown of Section 48E and scheduled tapering of 45X erode forward visibility. As demand growth moderates, throughput tied to First Solar’s U.S. fabs, which anchor 5N Plus’s core solar revenue stream, could level off sooner than previously modelled.

“We are maintaining our estimates for now, with project execution and panel throughput tracking well through 2026. If the current bill is enacted, however, we anticipate a near-term acceleration in demand, followed by a slower deployment cadence beyond 2027 – effectively a ‘pull-forward, then plateau’ dynamic.”

While the core outlook for 5N remains intact, Ezzat said the company’s growth trajectory may shift, with volumes likely peaking sooner than expected. He anticipates activity will be concentrated over the next 18 to 24 months, followed by a potential plateau as U.S. clean energy tax incentives are phased out. Ezzat noted that any short-term pullback in the stock, driven by policy uncertainty rather than weakening fundamentals, could offer investors a chance to build exposure ahead of a final policy resolution.

“This is not the same company investors once knew,” Ezzat said. “5N Plus has decisively shifted toward high-margin, value-added markets, diversified across structurally growing, non-correlated industries. With long-term contracts reinforcing deep-rooted customer relationships and a vertically integrated supply chain ensuring operational resilience, 5N Plus stands out as a compelling yet underappreciated growth story.”

Ezzat estimates that the company will generate $62.3-million in Adjusted EBITDA on $336.2-million in revenue in fiscal 2025. He expects those figures to improve to $69.8-million in Adjusted EBITDA on $375.9-million in revenue in fiscal 2026.

“Our target price implies a 13.1x/11.7x/10.6x 2025/2026/2027 EBITDA multiple,” he said. “The market’s underestimation of growth catalysts in specialty semiconductor and renewable energy applications presents a compelling case for multiple expansion as investors recognize the company’s direct alignment with surging demand in advanced materials for clean energy and advanced tech applications.

“Given the company’s positioning in these high-growth markets and its potential to capture outsized growth relative to peers, we don’t think it’s inconceivable for the market to assign a premium to 5N Plus amid continued secular tailwinds.”

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