New contracts and a strengthened balance sheet should keep cleantech company Greenlane Renewables (Greenlane Renewables Stock Quote, Chart, News, Analysts, Financials TSX:GRN) in the fast lane, says Haywood Capital Markets analyst Colin Healey. Healey delivered an update to clients on Friday where he maintained his \u201cBuy\u201d rating and \u201cTop Pick\u201d status for GRN and bumped up his target from $3.25 to $3.75, which at the time of publication represented a projected 12-month return of 40 per cent. It\u2019s been a busy week for Vancouver-based Greenlane, a global provider of biogas upgrading systems. The company graduated to the TSX senior board, announced the early retirement of a roughly $6.0-million promissory note set to mature on June 30, 2021, and signed two new contracts worth about $3.6 million. The new contracts involve a project in the Midwest US for upgrading biogas to renewable natural gas from dairy operations and an agreement to supply biogas upgrading equipment in Brazil. The latter represents Greenlane\u2019s fifth contract for upgrading equipment in Brazil. \u201cThe transition to renewable natural gas as an essential solution to decarbonize transportation and the natural gas grid continues to build momentum,\u201d said Brad Douville, President and CEO of Greenlane, in a Thursday press release. \u201cWe\u2019re seeing new opportunities progress through our sales pipeline at an increased pace and we\u2019re seeing results from the investments we made in product development, marketing and sales over the last 12 to 18 months. These two new contract wins demonstrate continued success in sectors where we see additional upside potential and a unique position in the market for Greenlane,\u201d Douville said. Greenlane\u2019s share price spiked over the last quarter of 2020, climbing 463 per cent over that period. So far in 2021, the stock is up a further 16 per cent. But Healey thinks there\u2019s more upside to Greenlane, saying in his report, \u201cWith the building RNG sector momentum and a strong balance sheet at GRN, the potential for near-term catalysts in H1\/21 remains high and we continue to see Greenlane, with its strong growth profile and market positioning, as a great way to play the \u2018green energy\u2019 theme.\u201d On the three events this week, Healey said retiring the $6.0-million promissory note further strengthens and simplifies GRN\u2019s balance sheet, while the up-listing to the TSX main board is a \u201cpositive evolution\u201d which should stimulate further momentum in the stock and increase its visibility with a wider audience. On the contract wins, Healey said they\u2019re also a positive demonstration of \u201cthe strength of GRN\u2019s sales and marketing strategy.\u201d The analyst also noted Greenlane\u2019s closing earlier this year on an over-subscribed bought deal for about $26.5 million, which gives the company ample dry powder to execute on accretive opportunities in M&A as well as investments in build, own and operate projects. On growth in the sector, Healey said the RNG market is still relatively small at about 0.3 per cent of the North American natural gas network, but it\u2019s growing rapidly as consumer demand increases for reduced carbon intensity for their energy usage and as governments continue to mandate growing percentages of renewable energy as part of their respective energy mixes. For examples, Healey pointed out BC\u2019s regulation for five per cent RNG by 2022 and 15 per cent by 2030, Quebec\u2019s regulation for one per cent RNG in 2020 and five per cent by 2025. \u201cIn the US, federal and select states (California, Oregon) are driving uptake of RNG as fuel for transportation,\u201d Healey said. \u201cIn Europe, France\u2019s ENGIE is said to invest \u20ac800 million over five years to develop ten per cent RNG in gas network by 2030; in Italy, the European Commission has approved \u20ac4.7 billion in a public support scheme for advanced biomethane and biofuels; and Denmark aims for 100-per-cent RNG by 2035.\u201d Looking ahead, Healey thinks Greenlane will generate full 2020 revenue and EBITDA of $27.3 million and $2.2 million, respectively, 2021 revenue and EBITDA of $46.6 million and $8.8 million, respectively, and 2022 revenue and EBITDA of $64.9 million and $12.4 million, respectively. \u201cWith a robust backlog of sales, sector momentum and the potential for a number of catalysts in 2021, we continue to like the outlook for Greenlane,\u201d Healey wrote. \u201cOur target increase to $3.75 per share is based on an EV\/2022 Revenue target multiple of 8.0x (previously 9.9x EV\/2021 Revenue. Our 2022 revenue forecast of $64.9 million reflects our view that Greenlane will continue to accelerate growth within its pipeline of opportunities through 2021 and into 2022, leveraging the same product development, sales and marketing strategy that is responsible for the current momentum.\u201d \u201cThis is backstopped by $50 million in existing orders (18-month execution) and a balance sheet to support accretive opportunities. An evolving focus on a \u2018Build, Own, Operate\u2019 model adds another dimension to the story. Greenlane remains a Top Pick,\u201d Healey wrote.