Alto Ingredients (ALTO) AI Stock Analysis

• Market Cap: $109.90M
• Dividend Yield: N/A
• Average Volume (3M): 1.39M
• Price to Earnings (P/E): ―
• Beta (1Y): 0.41
• Revenue Growth: -8.00%
• EPS Growth: -35.86%
• Country: US
• Employees: 393
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 0.19
• Shares Outstanding: 77,396,805
• 10 Day Avg. Volume: 3,664,371
• 30 Day Avg. Volume: 1,393,901
• PEG Ratio: -0.02
• Price to Book (P/B): 0.51
• Price to Sales (P/S): 0.12
• P/FCF Ratio: -7.86
• Enterprise Value/Market Cap: 1.52
• Enterprise Value/Revenue: 0.18
• Enterprise Value/Gross Profit: 9.36
• Enterprise Value/Ebitda: -12.57
• 1Y Price Target: $5.50
• Price Target Upside: 409.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 54 Neutral
• Price Target: $1.50 ▲(38.89% Upside)

Alto Ingredients' overall stock score is primarily influenced by its financial challenges, including declining revenues and negative margins. Despite these issues, the company has shown improvements in its earnings call with strategic initiatives and cost reductions. Technical analysis indicates some positive momentum, but valuation remains unattractive due to ongoing losses.

Positive Factors

Strategic Initiatives

The growth in renewable fuel exports highlights a strategic focus on sustainable products, enhancing long-term revenue potential and market positioning.

Operational Efficiency

Cost reduction efforts improve operational efficiency, potentially leading to better margins and financial health over the long term.

Cash Flow Management

Strong cash flow generation and debt repayment enhance financial flexibility, supporting future investments and stability.

Negative Factors

Declining Revenue

A decline in net sales indicates challenges in maintaining market share and revenue growth, potentially impacting long-term profitability.

Negative Profit Margins

Sustained negative profit margins suggest ongoing operational inefficiencies, which could hinder future profitability and competitiveness.

Project Delays

Delays in strategic projects like carbon capture can postpone potential benefits and impact the company's sustainability goals and market positioning.

Alto Ingredients Business Overview & Revenue Model

Company Description

Alto Ingredients, Inc. operates in the specialty ingredients sector, focusing primarily on the production and sale of high-quality alcohol and specialty ingredients derived from renewable resources. The company serves various industries, including food and beverage, pharmaceuticals, and personal care, offering products such as fuel-grade ethanol, high-purity alcohol, and other value-added ingredients. With a commitment to sustainability and innovation, Alto Ingredients leverages advanced technologies to maximize efficiency and minimize environmental impact in its production processes.

How the Company Makes Money

Alto Ingredients generates revenue primarily through the sale of its ethanol and specialty ingredients. The company has multiple revenue streams, including sales of fuel-grade ethanol to the energy sector, high-purity alcohol for industrial applications, and value-added products for the food and beverage industries. Key partnerships with major distributors and manufacturers enhance its market reach and enable the company to tap into various customer segments. Additionally, the company benefits from a focus on sustainability, which attracts clients looking for eco-friendly solutions. Fluctuations in commodity prices and regulatory changes also play significant roles in shaping the company's earnings, as they impact production costs and market demand for its products.

Alto Ingredients Financial Statement Overview

Summary

Alto Ingredients is experiencing financial challenges with declining revenue and negative profit margins. The balance sheet shows low leverage but poor returns on equity, and cash flow management is weak with negative operating and free cash flows.

Income Statement

Alto Ingredients has faced declining revenue and profitability over the past years, with a negative revenue growth rate of -1.16% in the TTM. The gross profit margin is low at 1.94%, and the net profit margin is negative at -5.44%, indicating challenges in maintaining profitability. The EBIT and EBITDA margins are also negative, reflecting operational inefficiencies. The company needs to address these issues to improve its financial health.

Balance Sheet

The balance sheet shows a relatively low debt-to-equity ratio of 0.02 in the TTM, suggesting manageable leverage. However, the return on equity is negative at -23.09%, indicating that the company is not generating sufficient returns on shareholder investments. The equity ratio is not provided, but the overall stability is affected by the negative ROE.

Cash Flow

Cash flow analysis reveals negative operating cash flow and free cash flow in the TTM, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is negative, indicating cash flow challenges. The free cash flow to net income ratio is positive, suggesting some ability to cover net losses, but overall cash flow management needs improvement.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	922.31M	965.26M	1.22B	1.34B	1.21B	897.02M
Gross Profit	17.88M	9.72M	15.65M	-27.55M	67.78M	52.86M
EBITDA	-13.31M	-26.76M	2.60M	-12.75M	74.43M	30.91M
Net Income	-50.18M	-58.98M	-28.00M	-41.60M	46.08M	-15.12M
Balance Sheet
Total Assets	388.47M	401.44M	454.24M	478.32M	484.95M	476.82M
Cash, Cash Equivalents and Short-Term Investments	33.14M	35.47M	30.01M	36.46M	50.61M	47.67M
Total Debt	5.14M	114.67M	105.46M	87.27M	63.65M	108.23M
Total Liabilities	166.07M	176.38M	174.68M	170.23M	139.74M	180.58M
Stockholders Equity	222.40M	225.06M	279.56M	308.09M	345.21M	296.24M
Cash Flow
Free Cash Flow	-10.01M	-14.59M	-7.51M	-31.70M	10.44M	65.20M
Operating Cash Flow	-6.08M	-3.52M	22.02M	6.05M	26.82M	71.78M
Investing Cash Flow	-13.45M	-13.47M	-33.03M	-37.66M	27.12M	23.32M
Financing Cash Flow	14.18M	7.72M	6.96M	19.01M	-40.00M	-66.42M

Alto Ingredients Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1.08
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALTO, the sentiment is Positive. The current price of 1.08 is below the 20-day moving average (MA) of 1.12, below the 50-day MA of 1.12, and below the 200-day MA of 1.16, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 68.52 is Neutral, neither overbought nor oversold. The STOCH value of 71.79 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ALTO.

Alto Ingredients Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
REX	75 Outperform	$1.06B	21.68	9.47%	―	-9.57%	-24.85%
SCL	62 Neutral	$967.42M	21.64	3.67%	3.49%	5.35%	-1.43%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
ALTO	54 Neutral	$109.90M	―	-20.64%	―	-8.00%	-35.86%
GPRE	53 Neutral	$671.81M	―	-22.21%	―	-12.07%	-821.68%
GEVO	52 Neutral	$495.77M	―	-11.71%	―	341.75%	20.16%
IOSP	49 Neutral	$1.89B	―	-0.09%	2.13%	-4.49%	-100.80%

Alto Ingredients Corporate Events

Alto Ingredients’ Earnings Call: Financial Gains Amid Challenges

The recent earnings call for Alto Ingredients, Inc. painted a picture of both progress and challenges. The company reported significant financial improvements and successful strategic initiatives, which were met with enthusiasm. However, the call also acknowledged hurdles such as a decline in net sales, impacts from dock outages, and delays in key projects, which tempered the overall positive sentiment.

Alto Ingredients, Inc. Reports Strong Q3 2025 Growth

Alto Ingredients, Inc. is a leading producer and distributor of specialty alcohols, renewable fuels, and essential ingredients, serving a diverse range of markets including Health, Home & Beauty, Food & Beverage, Industry & Agriculture, and Renewable Fuels.

Alto Ingredients Faces Potential Financial Setback Over Section 45Z Tax Credit Eligibility

Alto Ingredients, Inc. faces a significant risk concerning its ability to qualify for Section 45Z tax credits, which are crucial for low carbon fuel producers under the Inflation Reduction Act of 2022. The company’s Colombia plant and Pekin Campus dry mill are expected to apply for these credits, but their eligibility hinges on producing low carbon fuel at specific carbon intensities and volumes. Any failure to meet these production targets, whether due to operational disruptions or other factors, could prevent Alto Ingredients from receiving the anticipated tax benefits. This shortfall could materially and adversely impact the company’s financial performance and operational results.

Alto Ingredients’ Earnings Call: Balancing Successes and Challenges

The recent earnings call of Alto Ingredients, Inc. presented a balanced sentiment, highlighting both strategic successes and ongoing challenges. The company reported improvements in adjusted EBITDA, cost savings, and benefits from a favorable regulatory environment. However, these positives were offset by decreased sales volume, issues at the Pekin campus, and a higher net loss, reflecting a mixed outlook for the company.