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Alto Ingredients (ALTO)
NASDAQ:ALTO
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Alto Ingredients
(NASDAQ:ALTO)
52Neutral
Positive Factors
Cost Efficiency
Cost-cutting measures, including reducing headcount and cold idling a facility, are expected to save $8 million annually.
Strategic Acquisition
The acquisition of a liquid CO2 business is expected to be immediately accretive, providing future earnings upside.
Negative Factors
Revenue Decline
Revenues declined by 13.6% year-over-year due to lower ethanol prices, and the company reported a net loss for the quarter.
Alto Ingredients (ALTO) vs. S&P 500 (SPY)
Market Cap
$107.31M
Dividend YieldN/A
Average Volume (3M)611.27K
Price to Earnings (P/E)―
Beta (1Y)0.75
Revenue Growth-21.54%
EPS Growth13.34%
CountryUS
Employees460
SectorBasic Materials
Sector Strength62
IndustryChemicals
Share Statistics
EPS (TTM)-0.82
Shares Outstanding76,646,126
10 Day Avg. Volume560,065
30 Day Avg. Volume611,267
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.11
Price to Cash Flow (P/CF)1.40
P/FCF Ratio1.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$5.50Price Target Upside316.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Alto Ingredients Business Overview & Revenue Model
Company DescriptionPacific Ethanol, Inc. engages in the production and marketing of carbon renewable fuel. It operates through the Ethanol Production, and Marketing and Distribution business segments. The Ethanol Production segment includes the production and sale of ethanol and co-products. The Marketing and Distribution segment comprises of the marketing and merchant trading of company-produced ethanol; and co-products and third-party ethanol. The company was founded by William L. Jones and Neil M. Koehler on January 30, 2003 and is headquartered in Sacramento, CA.
How the Company Makes MoneyAlto Ingredients generates revenue through the production and sale of ethanol and its co-products, which include distillers grains and corn oil. The company operates multiple production facilities where it processes corn into ethanol, a renewable fuel widely used in the transportation sector. In addition to ethanol, Alto Ingredients produces specialty alcohols for various industrial applications, including sanitizers and solvents. The company benefits from government renewable fuel standards and incentives that promote ethanol use. Revenue is also supplemented by selling co-products like distillers grains, which are used as animal feed, and corn oil, which is used in biodiesel production. Strategic partnerships with agricultural and energy companies further enhance its market reach and profitability.
Alto Ingredients Financial Statement Overview
Summary
Alto Ingredients faces significant challenges in achieving profitability, as reflected in declining revenues and negative profit margins. The balance sheet indicates moderate leverage but declining equity levels, while the cash flow statement shows some ability to generate cash despite profitability issues. Overall, the company needs to improve its operational efficiency and financial health to enhance its financial position.Income Statement
Alto Ingredients has shown declining revenue over the TTM (Trailing-Twelve-Months) compared to the previous year with a negative revenue growth rate. The TTM gross profit margin is low at 1.16%, and the net profit margin is negative, indicating ongoing profitability challenges. The negative EBIT and EBITDA margins further highlight operational inefficiencies.40
Negative
Balance Sheet
The company's debt-to-equity ratio is moderate, suggesting a manageable level of leverage. However, the return on equity is negative, indicating a lack of profitability. The equity ratio is relatively healthy, showing some financial stability, but declining stockholders' equity over the years is concerning.55
Neutral
Cash Flow
Alto Ingredients has a positive operating cash flow to net income ratio, indicating good cash generation relative to net income. The free cash flow has improved but remains low, limiting flexibility for investments. The overall cash flow profile suggests moderate liquidity with some constraints.50
Neutral
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.00B | 1.22B | 1.34B | 1.21B | 897.02M | 1.42B | Gross Profit |
| 11.60M | 15.65M | -27.55M | 67.78M | 52.86M | -9.94M | EBIT |
| -20.49M | -23.85M | -61.36M | 16.52M | -18.60M | -74.68M | EBITDA |
| -5.27M | 2.60M | -12.75M | 61.89M | 51.15M | -33.19M | Net Income Common Stockholders |
| -36.22M | -28.00M | -41.60M | 46.08M | -17.28M | -101.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 26.63M | 30.01M | 36.46M | 50.61M | 47.67M | 19.00M | Total Assets |
| 659.98M | 454.24M | 478.32M | 484.95M | 476.82M | 612.50M | Total Debt |
| 231.56M | 105.46M | 87.27M | 63.65M | 108.23M | 268.42M | Net Debt |
| 204.93M | 75.44M | 50.81M | 13.04M | 60.57M | 249.43M | Total Liabilities |
| 340.62M | 174.68M | 170.23M | 139.74M | 180.58M | 385.45M | Stockholders Equity |
| 299.77M | 279.56M | 308.09M | 345.21M | 296.24M | 219.78M |
| Cash Flow | Free Cash Flow | ||||
| 3.36M | -7.51M | -31.70M | 10.44M | 65.20M | -26.64M | Operating Cash Flow |
| 18.07M | 22.02M | 6.05M | 26.82M | 71.78M | -23.36M | Investing Cash Flow |
| -17.11M | -33.03M | -37.66M | 27.12M | 23.32M | -3.28M | Financing Cash Flow |
| 2.68M | 6.96M | 19.01M | -40.00M | -66.42M | 19.01M |
Alto Ingredients Technical Analysis
Negative
1.32
Price Trends
1.62
Negative
1.58
Negative
1.54
Negative
Market Momentum
-0.06
Positive
35.49
Neutral
21.46
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALTO, the sentiment is Negative. The current price of 1.32 is below the 20-day moving average (MA) of 1.57, below the 50-day MA of 1.62, and below the 200-day MA of 1.54, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 35.49 is Neutral, neither overbought nor oversold. The STOCH value of 21.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ALTO.
Alto Ingredients Risk Analysis
Alto Ingredients disclosed 24 risk factors in its most recent earnings report. Alto Ingredients reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Alto Ingredients Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
63 Neutral | $1.41B | 12.45 | 8.61% | 1.85% | -23.68% | 11.84% | |
63 Neutral | $38.75B | 14.34 | 10.86% | 3.53% | -10.37% | -65.69% | |
60 Neutral | $23.33B | 13.86 | 7.78% | 4.13% | -9.01% | -43.53% | |
58 Neutral | $327.35M | 226.96 | 0.51% | ― | -10.30% | -93.51% | |
52 Neutral | $107.31M | ― | -23.38% | ― | -21.54% | 13.34% | |
47 Neutral | $2.64B | -3.82 | -29.05% | 3.32% | 2.72% | -29.50% | |
45 Neutral | $331.41M | ― | -9.65% | ― | -25.69% | 18.54% |
* Basic Materials Sector Average
Performance Comparison
ALTO
Alto Ingredients
1.39
-0.61
-30.50%
ADM
Archer Daniels Midland
47.25
-8.84
-15.76%
GPRE
Green Plains
5.08
-15.13
-74.86%
ANDE
The Andersons
41.09
-11.33
-21.61%
VLO
Valero Energy
125.80
-29.00
-18.73%
BIOX
Bioceres Crop Solutions
4.61
-8.20
-64.01%
Alto Ingredients Earnings Call Summary
Earnings Call Date: Mar 5, 2025 | % Change Since: -10.20% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements, such as the acquisition of a CO2 processing plant and operational efficiency improvements. However, these were countered by the challenges faced due to market conditions, leading to a consolidated net loss and the cold idling of the Magic Valley plant. The sentiment was mixed, with both positive initiatives and significant financial and operational challenges.Highlights
Acquisition of Beverage-Grade Liquid CO2 Processing Plant
In January, Alto Ingredients acquired a beverage-grade liquid CO2 processing plant adjacent to its Columbia facility. This acquisition is expected to improve the facility's top and bottom-line results, create cost synergies, and offer growth opportunities. The acquisition was immediately accretive with a compelling payback period of approximately two years.
Operational Efficiency and Cost Savings
The company implemented several cost-saving initiatives, including the cold idling of the Magic Valley plant and rationalizing Eagle Alcohol's operations. These measures aligned the company with a smaller operational footprint and are expected to save approximately $8 million annually.
Increased Production and Certifications
The Pekin campus increased production by 3.8 million gallons year-over-year, a 7% increase, due to improved plant utilization. Additionally, the campus achieved ISCC certification, enabling exports of certified renewable fuel to the EU.
Entry into European Market
Alto Ingredients began exporting certified renewable fuel to European markets in Q4 2024 and plans to expand exports in 2025.
Lowlights
Challenging Market Conditions and Financial Losses
Q4 2024 market conditions were challenging with crush margins down compared to the prior quarter and year. The company reported a consolidated net loss of $41.7 million, including $30.5 million in asset impairments and acquisition-related expenses.
Magic Valley Plant Challenges
The Magic Valley plant faced significant operational challenges due to high corn prices and increased soy crush capacity, leading to its cold idling. A significant impairment charge was taken related to this plant in Q4.
Decline in Sales Price and Crush Margin
The average sales price per gallon decreased from $2.24 in Q4 2023 to $1.88 in Q4 2024, reducing net sales by $38 million year-over-year. The market crush margin declined nearly $0.18, resulting in an $8.7 million net adverse impact to gross profit.
Company Guidance
During the Alto Ingredients Fourth Quarter and Year-End 2024 Financial Results Conference Call, several key metrics and strategic initiatives were discussed. The company reported a net loss of $41.7 million for Q4 2024, including $30.5 million in asset impairments and acquisition-related expenses. Adjusted EBITDA was negative $7.7 million, with a total of 95.1 million gallons sold at an average price of $1.88 per gallon, down from $2.24 in Q4 2023. Cost-saving initiatives are expected to save approximately $8 million annually, with a 16% reduction in headcount contributing to these savings. The acquisition of a CO2 processing facility for over $7 million is anticipated to have a compelling two-year payback, with the potential to produce over 70,000 tons annually. Additionally, the company is pursuing strategic options including asset sales, mergers, or other transactions to maximize shareholder value.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.