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Alto Ingredients (ALTO)
NASDAQ:ALTO
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Alto Ingredients
(NASDAQ:ALTO)
Rating:37Underperform
Price Target:
$1.00
▲( 8.70% Upside)
Positive Factors
Acquisition
The acquisition of a liquid CO2 business is expected to be immediately accretive, providing future earnings upside.
Cost Management
Cost-cutting measures, including reducing headcount and cold idling a facility, are expected to save $8 million annually.
Negative Factors
Global Headwinds
Global headwinds resulting from reduced exports to China have the potential to impact ethanol demand adversely.
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. SPDR S&P 500 ETF (SPY)
Market Cap
$69.51M
Dividend YieldN/A
Average Volume (3M)413.03K
Price to Earnings (P/E)―
Beta (1Y)1.01
Revenue Growth-17.27%
EPS Growth-112.62%
CountryUS
Employees393
SectorBasic Materials
Sector Strength63
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.16
Shares Outstanding77,210,175
10 Day Avg. Volume459,064
30 Day Avg. Volume413,029
Financial Highlights & Ratios
PEG Ratio0.02
Price to Book (P/B)0.38
Price to Sales (P/S)0.00
P/FCF Ratio-6.14
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 Upside497.83% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Alto Ingredients Business Overview & Revenue Model
Company DescriptionAlto Ingredients, Inc. (ALTO) is a leading producer and marketer of specialty alcohols and essential ingredients. Operating primarily in the United States, the company serves key markets such as health, home and beauty, food and beverage, and renewable fuels. Its core products include high-grade alcohols used in consumer products, as well as corn-based products like distillers' grains and corn oil.
How the Company Makes MoneyAlto Ingredients generates revenue through the production and sale of its specialty alcohols and essential ingredients. The company operates several production facilities where it converts corn into alcohol and other co-products. Revenue streams include high-grade alcohols for consumer and industrial use, co-products such as distillers' grains sold to the animal feed industry, and corn oil. Additionally, the company benefits from strategic partnerships and distribution agreements that enhance market reach and operational efficiency. Factors such as commodity prices, government regulations on renewable fuels, and market demand for specialty alcohols significantly influence its earnings.
Alto Ingredients Financial Statement Overview
Summary
Alto Ingredients is experiencing significant financial difficulties, marked by declining revenues, negative profitability margins, and cash flow issues. The low leverage is a positive aspect, but the negative return on equity indicates inefficiencies in generating shareholder returns. Overall, the financial statements reflect a company struggling with operational and financial challenges, which may pose risks for future stability and growth.Income Statement
Alto Ingredients has experienced a significant decline in revenue from $1,222.94M in 2023 to $965.26M in 2024, marking a revenue growth rate of -21.06%. Additionally, the company has faced notable profitability challenges, with a negative gross profit margin of 1.01% and a net profit margin of -6.24% in 2024. The EBIT and EBITDA margins are also negative. These factors indicate struggling operational efficiency and weak profitability.40
Negative
Balance Sheet
The company's debt-to-equity ratio stands at 0.02, reflecting low leverage, which is a positive aspect. However, the return on equity is negative at -26.77%, indicating shareholders are not seeing positive returns. The equity ratio is not available for 2024 due to missing total assets data, but the available data indicates a weakening financial position over time.55
Neutral
Cash Flow
Alto Ingredients has faced significant challenges in cash flow management, with a negative free cash flow of -$14.59M in 2024. The operating cash flow to net income ratio is negative, indicating cash flow issues. The free cash flow to net income ratio is also negative, highlighting ongoing liquidity concerns and raising questions about the company's ability to sustain operations without external financing.30
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 965.26M | 1.22B | 1.34B | 1.21B | 897.02M | Gross Profit |
| 9.72M | 15.65M | -27.55M | 67.78M | 52.86M | EBIT |
| -51.67M | -23.85M | -61.36M | 16.52M | -18.60M | EBITDA |
| -51.67M | 2.60M | -12.75M | 61.89M | 51.15M | Net Income Common Stockholders |
| -60.25M | -28.00M | -41.60M | 46.08M | -17.28M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 35.47M | 30.01M | 36.46M | 50.61M | 47.67M | Total Assets |
| 401.44M | 454.24M | 478.32M | 484.95M | 476.82M | Total Debt |
| 4.85M | 105.46M | 87.27M | 63.65M | 108.23M | Net Debt |
| 4.85M | 75.44M | 50.81M | 13.04M | 60.57M | Total Liabilities |
| 176.38M | 174.68M | 170.23M | 139.74M | 180.58M | Stockholders Equity |
| 225.06M | 279.56M | 308.09M | 345.21M | 296.24M |
| Cash Flow | Free Cash Flow | |||
| -14.59M | -7.51M | -31.70M | 10.44M | 65.20M | Operating Cash Flow |
| -3.52M | 22.02M | 6.05M | 26.82M | 71.78M | Investing Cash Flow |
| -13.47M | -33.03M | -37.66M | 27.12M | 23.32M | Financing Cash Flow |
| 7.72M | 6.96M | 19.01M | -40.00M | -66.42M |
Alto Ingredients Technical Analysis
Neutral
0.92
Price Trends
0.99
Negative
1.30
Negative
1.42
Negative
Market Momentum
-0.02
Negative
50.56
Neutral
76.35
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ALTO, the sentiment is Neutral. The current price of 0.92 is above the 20-day moving average (MA) of 0.89, below the 50-day MA of 0.99, and below the 200-day MA of 1.42, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 50.56 is Neutral, neither overbought nor oversold. The STOCH value of 76.35 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 2 New Risks
1.
Our CCS project may be adversely affected by the SAFE CCS Act and other Regulations. Q4, 2024
2.
The United States Supreme Court's decision in the case of Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. may result in less industry-favorable rulemaking and agency interpretations of laws and regulations, which could materially and adversely affect our results of operations, cash flows and financial condition as well as the business and financial prospects of certain capital improvement projects, such as CCS. Q4, 2024
Alto Ingredients Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $706.84M | 12.75 | 10.83% | ― | -23.12% | -4.89% | |
65 Neutral | $607.71M | 26.52 | 5.08% | 0.95% | -4.09% | -66.97% | |
50 Neutral | $1.98B | -1.07 | -21.34% | 3.71% | 2.03% | -30.65% | |
49 Neutral | $289.72M | ― | -12.34% | ― | -19.82% | -34.91% | |
48 Neutral | $258.73M | ― | -16.11% | ― | 145.38% | -22.02% | |
42 Neutral | $92.69M | ― | 103.25% | 1.51% | -5.28% | 51.91% | |
37 Underperform | $69.51M | ― | -24.43% | ― | -17.27% | -112.62% |
* Basic Materials Sector Average
Performance Comparison
ALTO
Alto Ingredients
0.92
-0.65
-41.40%
GEVO
Gevo
1.08
0.39
56.52%
GPRE
Green Plains
4.43
-13.84
-75.75%
KOP
Koppers Holdings
30.37
-12.23
-28.71%
REX
Rex American
41.76
-14.26
-25.46%
TSE
Trinseo
2.60
-0.69
-20.97%
Alto Ingredients Earnings Call Summary
Earnings Call Date:May 07, 2025
(Q1-2025)
| % Change Since: 6.98%|
Next Earnings Date:Aug 11, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive outcomes such as improved margins, successful acquisitions, and potential regulatory tailwinds from E15, against challenges like lower alcohol premiums, high inventory levels, and operational disruptions. The sentiment is balanced by both highlights and lowlights.Q1-2025 Updates
Positive Updates
Improved Gross Margin and Adjusted EBITDA
During Q1 2025, gross margin and adjusted EBITDA improved compared to Q1 2024, reflecting operational uptime and carbon optimization initiatives.
Successful Acquisition of Beverage-Grade Liquid CO2 Plant
The acquisition of a beverage-grade liquid CO2 plant has reduced management and staffing costs, enhancing operational coordination and overall productivity.
Cost Savings from Workforce Reduction
A 16% reduction in headcount is expected to save approximately $8 million annually, with the financial benefit starting in Q2.
Solid Demand for ISCC Certified Renewable Fuel
The ISCC certification enabled access to higher-margin sales, partially offsetting domestic market challenges.
Potential Positive Impact of E15 Fuel Waiver
The EPA's E15 fuel waiver is expected to allow blending through the summer, potentially boosting ethanol demand.
Negative Updates
Decline in High-Quality Alcohol Premiums
Premiums on domestic high-quality alcohol were generally lower in Q1 than in the same quarter last year, reflecting increased competition.
Challenges from High Inventory Levels
Despite improved crush margins, high inventory levels with production outpacing demand kept margin expansion in check.
Damage to Pekin Load Out Dock
The Pekin load out dock was damaged due to rapidly rising river levels, negatively impacting production and logistics.
Potential Legal Impact on CO2 Sequestration
Illinois Bill SB1723 could impact CO2 sequestration activities, requiring relocation of storage sites and affecting CCS initiatives.
Net Loss Remains Unchanged
Consolidated net loss was $11.7 million for both Q1 2025 and Q1 2024, indicating ongoing financial challenges.
Company Guidance
During the first quarter of 2025, Alto Ingredients reported improvements in gross margin and adjusted EBITDA compared to the first quarter of 2024, driven by operational uptime and strategic acquisitions, including a beverage-grade liquid carbon dioxide processing plant. The company executed a 16% headcount reduction over Q4 and Q1, anticipating $8 million in annual savings starting in Q2. While net sales declined to $227 million due to various market factors, adjusted EBITDA improved to negative $4.4 million from negative $7.1 million year-over-year. The company sold 89.6 million gallons, a decrease from 99 million gallons in the prior year, and cited challenges with high inventory levels and market competition. Despite these challenges, Alto Ingredients successfully expanded ISCC certified renewable fuel sales and expressed optimism about potential regulatory changes that could boost ethanol demand significantly.Alto Ingredients Corporate Events
Executive/Board ChangesShareholder Meetings
Alto Ingredients Announces Board Changes in 2025
Neutral
Mar 18, 2025
On March 17, 2025, Alto Ingredients, Inc. entered into a letter agreement with the Radoff/Torok Group, which includes provisions for board member nominations and standstill agreements. As part of this agreement, board members Douglas L. Kieta and Michael D. Kandris announced they would not stand for re-election at the 2025 Annual Meeting, impacting the company’s board composition and governance structure.
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.