The Motley Fool

Is the Eqtec share price set to make a comeback?

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

potted green plant grows up in arrow shape
Image source: Getty Images

The Eqtec (LSE:ETQ) share price has had a difficult year. Despite achieving some explosive growth in 2020, this green energy penny stock has been on a downward trajectory throughout 2021. Since the start of the year, it has fallen by just over 40%. However, over the 12 months, the Eqtec share price is still up by nearly 115%.

Last week, the firm released its interim earnings report, which showed some promising signs of progress. So, is the stock about to make a comeback? And should I consider adding it to my portfolio? Let’s take a look.

5 Stocks For Trying To Build Wealth After 50

Markets around the world are reeling from the coronavirus pandemic… and with so many great companies trading at what look to be ‘discount-bin’ prices, now could be the time for savvy investors to snap up some potential bargains.

But whether you’re a newbie investor or a seasoned pro, deciding which stocks to add to your shopping list can be a daunting prospect during such unprecedented times.

Fortunately, The Motley Fool UK analyst team have short-listed five companies that they believe STILL boast significant long-term growth prospects despite the global upheaval…

We’re sharing the names in a special FREE investing report that you can download today. And if you’re 50 or over, we believe these stocks could be a great fit for any well-diversified portfolio.

Click here to claim your free copy now!

The fall of the Eqtec share price

I’ve explored this company before. But as a quick reminder, Eqtec is a waste-to-energy business that has developed a proprietary gasification technology. This system takes in waste plastic as well as biomass and converts it into a clean synthetic gas that can be used as an alternative fuel for gas turbine power plants.

Given that the UK government recently unveiled its plan to eliminate carbon emissions by 2050, it’s easy to see the allure of this business to investors. Even more so when considering that the waste-to-energy market is expected to grow by 80% over the next six years.

But this excitement from investors ultimately translated into a runaway valuation, with the Eqtec share price pushing the business’s market capitalisation to as high as around £270m. By comparison, revenue generated in 2020 came in at a mere €2.23m (£1.91m). With that in mind, it’s pretty clear that the stock was being heavily inflated by unrealistic expectations. So, seeing the Eqtec share price fall throughout 2021 is hardly surprising.

The Eqtec share price has its risks

Growth on the horizon

Regardless of how Eqtec’s stock has been performing, the underlying business is making good progress. In its latest interim results, it said the construction of its power plants in California and Greece continued to stay on schedule. Meanwhile, planning permission has been granted for its flagship Billingham project. Once constructed, this facility is estimated to generate enough electricity to power 50,000 homes in the UK. And more recently, the business has signed a new three-year collaboration agreement with Toyota Motors to explore a waste-to-energy solution for its car manufacturing plant in Deeside.

Assuming ongoing contracts are completed on time this year, the firm is set to generate total revenue of €15m (£12.84m) by the end of 2021. That’s about a 580% increase compared to a year ago. Needless to say, if the firm can continue delivering triple-digit growth moving forward, the Eqtec share price could quickly start rising again.

The bottom line

Overall, my views on this business have improved since the last time I looked at it back in April. The progress made during the previous six months is quite encouraging. However, there remains a long road ahead. And even after this year’s decline, the Eqtec share price continues to look too expensive for me. Therefore, I’m still keeping this penny stock on my watchlist.

But there is another growth stock that caught my attention this week. And it looks like it might be about to explode!

One FTSE “Snowball Stock” With Runaway Revenues

Looking for new share ideas?

Grab this FREE report now.

Inside, you discover one FTSE company with a runaway snowball of profits.

From 2015-2019…

  • Revenues increased 38.6%.
  • Its net income went up 19.7 times!
  • Since 2012, revenues from regular users have almost DOUBLED

The opportunity here really is astounding.

In fact, one of its own board members recently snapped up 25,000 shares using their own money...

So why sit on the side lines a minute longer?

You could have the full details on this company right now.

Grab your free report – while it’s online.

Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Our 6 'Best Buys Now' Shares

Renowned stock-picker Mark Rogers and his analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply click below to discover how you can take advantage of this.