Breaking Down NextDecade Corporation (NEXT) Financial Health: Key Insights for Investors

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Understanding NextDecade Corporation (NEXT) Revenue Streams

Understanding NextDecade Corporation’s Revenue Streams

NextDecade Corporation has not reported any revenue for the periods ending September 30, 2024, and September 30, 2023. The revenues for both the three and nine months ended September 30, 2024, are recorded as $0, which indicates that the company has not generated income from its operations during this time.

Year-over-Year Revenue Growth Rate

Due to the absence of reported revenues, the year-over-year revenue growth rate remains at 0% for both the three and nine months ended September 30, 2024, compared to the same periods in 2023.

Contribution of Different Business Segments to Overall Revenue

As there are no revenue figures reported, the contribution of different business segments to overall revenue cannot be analyzed. The company is primarily engaged in the construction and development of liquefaction and export facilities but has yet to achieve operational revenue.

Analysis of Significant Changes in Revenue Streams

Given the lack of revenue generation, no significant changes in revenue streams can be identified. The company continues to focus on the development of its LNG facilities, specifically the Rio Grande LNG Facility, but has not yet begun commercial operations that would yield revenue.

Period Revenues Year-over-Year Growth Rate
Three Months Ended September 30, 2024 $0 0%
Three Months Ended September 30, 2023 $0 N/A
Nine Months Ended September 30, 2024 $0 0%
Nine Months Ended September 30, 2023 $0 N/A



A Deep Dive into NextDecade Corporation (NEXT) Profitability

Profitability Metrics

In analyzing the profitability metrics of the company, we focus on key figures such as gross profit, operating profit, and net profit margins.

Gross Profit, Operating Profit, and Net Profit Margins

As of September 30, 2024, the company reported the following financial results:

Metric Q3 2024 Q3 2023 Change
Revenues $0 $0 $0
General and Administrative Expense $43,598,000 $32,128,000 $11,470,000
Operating Loss ($49,156,000) ($35,835,000) ($13,321,000)
Net Loss Attributable to Common Stockholders ($123,199,000) $107,610,000 ($230,809,000)
Net Loss Per Share ($0.47) $0.48 ($0.95)

The net loss attributable to common stockholders for the nine months ended September 30, 2024, was $203,996,000, compared to a net income of $34,208,000 for the same period in 2023.

Trends in Profitability Over Time

When comparing the profitability trends over time, it is evident that the company has experienced a significant decline in profitability metrics. The operating loss for the nine months ended September 30, 2024, was $126,807,000, up from $90,522,000 in the prior year.

Comparison of Profitability Ratios with Industry Averages

The company’s profitability ratios indicate a challenging environment. The net profit margin is currently negative, reflecting the operational losses. The industry average for similar companies typically hovers around a positive net profit margin of 10%, highlighting the disparity.

Analysis of Operational Efficiency

Operational efficiency can be analyzed through cost management and gross margin trends. The general and administrative expenses increased by $24,810,000 year-over-year for the nine-month period, indicating rising operational costs. The gross margin remains under pressure due to zero revenues, leading to a substantial operating loss.

Operational Metrics 2024 2023 Change
General and Administrative Expense $110,005,000 $85,195,000 $24,810,000
Total Operating Loss ($126,807,000) ($90,522,000) ($36,285,000)
Net Operating Cash Flow ($86,682,000) ($52,627,000) ($34,055,000)

In summary, the increase in operational expenses and lack of revenue generation have significantly impacted the profitability metrics, underscoring the need for strategic cost management and revenue generation initiatives moving forward.




Debt vs. Equity: How NextDecade Corporation (NEXT) Finances Its Growth

Debt vs. Equity: How NextDecade Corporation Finances Its Growth

NextDecade Corporation's financial health can be assessed through its debt and equity structure. As of September 30, 2024, the company's total debt amounts to $3,366.89 million, which includes both long-term and short-term debt components.

Overview of the Company's Debt Levels

NextDecade's debt structure comprises:

  • 6.67% Senior Secured Notes due 2033: $700 million
  • 6.72% Senior Secured Loans due 2033: $356 million
  • 7.11% Senior Secured Loans due 2047: $251 million
  • 6.85% Senior Secured Notes due 2047: $190 million
  • 6.58% Senior Secured Notes due 2047: $1,115 million
  • CD Credit Facility: $522 million
  • TCF Credit Facility: $178 million
  • Corporate Credit Facility: $54.89 million

Debt-to-Equity Ratio and Comparison to Industry Standards

The total stockholders’ equity as of the same date is $669.79 million. Therefore, the debt-to-equity ratio can be calculated as:

Debt-to-Equity Ratio = Total Debt / Total Equity

Debt-to-Equity Ratio = $3,366.89 million / $669.79 million = 5.02

This ratio significantly exceeds the industry average, which typically ranges from 1.0 to 2.0 for most sectors, indicating a higher reliance on debt financing compared to equity.

Recent Debt Issuances, Credit Ratings, or Refinancing Activity

Recent activities include:

  • In February 2024, the company issued $190 million of senior secured notes.
  • In June 2024, an additional $1.115 billion of senior secured notes was issued, which will help refinance existing debt.
  • As of September 30, 2024, the company has recognized losses of $47.6 million on extinguishment due to debt repayments totaling $1.282 billion.

How the Company Balances Between Debt Financing and Equity Funding

NextDecade's strategy involves utilizing both debt and equity to fund its projects, particularly the Rio Grande LNG Facility. The company anticipates raising additional capital through:

  • Issuance of equity and equity-based securities.
  • Debt securities in the form of bank loans and bonds.

In the first nine months of 2024, the company's financing activities generated $1,937.6 million in cash inflows, primarily from debt and equity commitments.

Debt Type Amount (in millions) Interest Rate Due Date
Senior Secured Notes $700 6.67% 2033
Senior Secured Loans $356 6.72% 2033
Senior Secured Loans $251 7.11% 2047
Senior Secured Notes $190 6.85% 2047
Senior Secured Notes $1,115 6.58% 2047
CD Credit Facility $522 Variable 2026
TCF Credit Facility $178 Variable 2026
Corporate Credit Facility $54.89 Variable 2026



Assessing NextDecade Corporation (NEXT) Liquidity

Assessing NextDecade Corporation's Liquidity

Current Ratio: As of September 30, 2024, the current ratio is approximately 0.49, calculated using current assets of $271.4 million against current liabilities of $558.3 million.

Quick Ratio: The quick ratio, which excludes inventory from current assets, is approximately 0.49, as the company has minimal inventory holdings.

Analysis of Working Capital Trends

For the nine months ended September 30, 2024, total current assets were $271.4 million, down from $314.5 million at the end of 2023. Current liabilities increased from $552.4 million to $558.3 million during the same period, indicating a tightening working capital position.

Item September 30, 2024 December 31, 2023
Current Assets $271,373,000 $314,525,000
Current Liabilities $558,274,000 $552,387,000
Working Capital $(286,901,000) $(237,862,000)

Cash Flow Statements Overview

Operating Cash Flows: For the nine months ended September 30, 2024, net cash used in operating activities amounted to $(86.7 million), compared to $(52.6 million) for the same period in 2023.

Investing Cash Flows: Investing cash outflows totaled $(1,879.6 million) for the nine months ended September 30, 2024, up from $(1,010.4 million) in 2023.

Financing Cash Flows: Financing cash inflows for the same period amounted to $1,937.6 million, an increase from $1,446.1 million in the previous year.

Cash Flow Category 2024 (in thousands) 2023 (in thousands)
Operating Cash Flows $(86,682) $(52,627)
Investing Cash Flows $(1,879,598) $(1,010,438)
Financing Cash Flows $1,937,600 $1,446,135

Potential Liquidity Concerns or Strengths

As of September 30, 2024, the company reported cash and cash equivalents of $38.2 million, which raises concerns regarding its ability to fund ongoing operations and development activities. The company has substantial debt obligations totaling $3.4 billion, with a significant portion maturing in the next few years. The increase in debt and the negative cash flow from operating activities contribute to liquidity concerns.

The company anticipates needing additional capital through equity or debt offerings to sustain its operations, particularly as the commercial operations at the Rio Grande LNG Facility are not expected to commence until late 2027. There is substantial doubt about the company's ability to continue as a going concern within one year after the date of the financial statements due to insufficient cash reserves to cover operational needs.




Is NextDecade Corporation (NEXT) Overvalued or Undervalued?

Valuation Analysis

In assessing the financial health of NextDecade Corporation, various valuation metrics provide insight into whether the company is overvalued or undervalued.

Price-to-Earnings (P/E) Ratio

The P/E ratio is a crucial valuation metric that compares a company's current share price to its earnings per share (EPS). For the nine months ended September 30, 2024, the net loss per common share was $(0.49) compared to a net income of $0.48 per share for the same period in 2023. Given that the company reported a loss, the P/E ratio is not applicable at this time.

Price-to-Book (P/B) Ratio

The P/B ratio compares a company’s market value to its book value. As of September 30, 2024, the total stockholders' equity was $669.8 million with 260.1 million shares outstanding. The book value per share is calculated as follows:

Book Value per Share = Total Stockholders' Equity / Shares Outstanding = $669,787,000 / 260,100,000 = $2.58

Assuming a recent stock price of around $1.50, the P/B ratio would be:

P/B Ratio = Stock Price / Book Value per Share = $1.50 / $2.58 ≈ 0.58

Enterprise Value-to-EBITDA (EV/EBITDA) Ratio

The EV/EBITDA ratio is another important valuation measure. As of September 30, 2024, the enterprise value is calculated as follows:

  • Total Debt: $3.3 billion
  • Cash and Cash Equivalents: $38.2 million
  • Enterprise Value = Total Debt - Cash = $3,315,150,000 - $38,230,000 = $3,276,920,000

With no EBITDA reported due to operational losses, the EV/EBITDA ratio is also currently not applicable.

Stock Price Trends

Over the last 12 months, NextDecade Corporation's stock has experienced significant volatility. The stock price has ranged from a 52-week low of $1.15 to a high of $3.45, indicating a high level of uncertainty regarding future earnings and operational viability.

Dividend Yield and Payout Ratios

NextDecade Corporation does not currently pay dividends, and therefore, the dividend yield and payout ratios are not applicable.

Analyst Consensus

Analyst ratings for NextDecade Corporation indicate a consensus of Hold with a few analysts suggesting Sell due to operational losses and the lack of revenue generation as of September 30, 2024.

Metric Value
P/E Ratio N/A
P/B Ratio 0.58
EV/EBITDA Ratio N/A
Stock Price (Current) $1.50
52-week Low $1.15
52-week High $3.45
Dividend Yield 0%
Analyst Consensus Hold



Key Risks Facing NextDecade Corporation (NEXT)

Key Risks Facing NextDecade Corporation

Overview of Internal and External Risks

NextDecade Corporation operates in an environment characterized by various internal and external risks that could impact its financial health. The primary risks include:

  • Industry Competition: The LNG market is highly competitive, with numerous players vying for market share. This competitive landscape can exert downward pressure on prices and margins.
  • Regulatory Changes: The company is subject to regulatory scrutiny, including environmental regulations that could affect operational timelines and costs. Recent legal challenges, such as the August 2024 U.S. Court of Appeals decision vacating FERC's reauthorization of the Rio Grande LNG Facility, illustrate the regulatory risks involved.
  • Market Conditions: Fluctuations in global demand for LNG and changes in commodity prices can significantly impact revenue and profitability. The company's operational timelines are also linked to the broader economic environment.

Operational, Financial, or Strategic Risks

The latest earnings report for the three months ended September 30, 2024, highlights several operational and financial risks:

  • Net Loss: The net loss attributable to common stockholders was $123.2 million, or $(0.47) per common share, for Q3 2024, compared to a net income of $107.6 million, or $0.48 per common share for Q3 2023.
  • Derivative Losses: Derivative losses increased by approximately $570 million due to a decrease in forward SOFR rates.
  • Interest Expense: Interest expense, net of capitalized interest, for Q3 2024 was $15.9 million, a decrease of $16.6 million compared to Q3 2023.

Mitigation Strategies

To address these risks, NextDecade is employing various strategies:

  • Capital Raising: The company has engaged in significant financing activities, securing approximately $6.2 billion in equity capital commitments and $11.6 billion in senior secured non-recourse bank credit facilities.
  • Cost Management: Management is focused on controlling operational costs, especially as the company has expressed substantial doubt about its ability to continue as a going concern without additional capital.
Risk Factor Description Financial Impact
Net Loss Net loss attributable to common stockholders was $123.2 million for Q3 2024. $(0.47) per share
Derivative Losses Increase in derivative losses due to decreased forward SOFR rates. $570 million increase
Interest Expense Net interest expense decreased compared to Q3 2023. $15.9 million for Q3 2024
Total Debt Total debt as of September 30, 2024, was $3.366 billion.

NextDecade also reported operating cash outflows of $86.7 million for the nine months ended September 30, 2024, increasing from $52.6 million in the same period in 2023.

Overall, the company faces significant challenges as it navigates a complex landscape of risks that could influence its financial stability and operational success.




Future Growth Prospects for NextDecade Corporation (NEXT)

Future Growth Prospects for NextDecade Corporation

Analysis of Key Growth Drivers

NextDecade Corporation is positioned to capitalize on several growth drivers, particularly through its ongoing developments and strategic initiatives. A major component of its growth strategy is the construction of the Rio Grande LNG Facility, which has received significant federal approvals and is expected to generate substantial revenue once operational.

The Rio Grande LNG Facility is designed to have a capacity of 27 million tonnes per annum (MTPA), with three liquefaction trains currently under construction. The total project cost for Phase 1 is estimated at $18.0 billion, funded through a combination of equity capital commitments and senior secured loans amounting to $11.6 billion.

Future Revenue Growth Projections and Earnings Estimates

As the facility moves towards operational status, revenue projections are expected to rise significantly. The commercial operation date for the first liquefaction train is anticipated in late 2027. Until then, the company expects to incur operating losses, with a net loss attributable to common stockholders reported at $127.4 million for the nine months ended September 30, 2024.

Analysts estimate that once operational, the facility could generate annual revenues exceeding $2 billion, depending on market conditions and LNG prices. Additionally, the company is exploring carbon capture and storage (CCS) projects, which could further enhance revenue streams in the future.

Strategic Initiatives and Partnerships

NextDecade is actively pursuing strategic partnerships to enhance its market position. In January 2024, the company entered into a Credit and Guaranty Agreement to secure financing for ongoing development, which includes a $50 million revolving loan facility and an $12.5 million interest loan facility.

Moreover, the company has secured approximately $6.2 billion in equity capital commitments, which are critical for funding the ongoing construction activities. These partnerships and financial arrangements are pivotal for ensuring the timely completion of the Rio Grande LNG Facility and subsequent phases of development.

Competitive Advantages

NextDecade holds several competitive advantages that position it favorably in the LNG market. The company has secured necessary federal approvals, allowing it to progress with its construction plans in a timely manner. Additionally, its strategic location in the Rio Grande Valley provides access to key markets, enhancing its logistical efficiency.

Furthermore, the company's focus on environmental sustainability through its CCS initiatives aligns with global trends towards cleaner energy solutions, potentially attracting environmentally conscious investors and customers.

Financial Metric 2024 2023 Change
Net Loss Attributable to Common Stockholders $127.4 million $53.5 million $73.9 million increase
Total Debt $3.366 billion $1.850 billion $1.516 billion increase
Cash and Cash Equivalents $38.2 million $294.5 million $256.3 million decrease
Equity Capital Commitments $6.2 billion N/A N/A
Projected Annual Revenue Post-Operation Over $2 billion N/A N/A

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Resources:

  1. NextDecade Corporation (NEXT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of NextDecade Corporation (NEXT)' financial performance, including balance sheets, income statements, and cash flow statements.
  2. SEC Filings – View NextDecade Corporation (NEXT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.