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Alto Ingredients (ALTO)
NASDAQ:ALTO
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Alto Ingredients (ALTO) AI Stock Analysis

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ALTO

Alto Ingredients

(NASDAQ:ALTO)

Rating:52Neutral
Price Target:
$1.50
▲(27.12%Upside)
Alto Ingredients faces significant financial challenges, including declining revenues and ongoing losses, which heavily weigh on its stock score. Technical analysis shows moderate momentum, while valuation remains a concern due to negative earnings. The recent earnings call and corporate events offer some optimism, yet persistent risks are evident.
Positive Factors
Acquisition and productivity
The company acquired the liquid CO2 business adjacent to its Columbia facility, now named Alto Carbonic LLC, and has quickly lowered combined costs of the facility, improved operations, and increased productivity.
Strategic management actions
Management is considering various strategic options to unlock shareholder value beyond selling assets, indicating a proactive approach to improving the company's financial health.
Negative Factors
Earnings and financial performance
Revenues declined by 13.6% year-over-year due to lower ethanol prices, and the company reported a net loss for the quarter.
Global market challenges
Global headwinds resulting from reduced exports to China have the potential to impact ethanol demand adversely.

Alto Ingredients (ALTO) vs. SPDR S&P 500 ETF (SPY)

Alto Ingredients Business Overview & Revenue Model

Company DescriptionAlto Ingredients, Inc. (ALTO) is a leading producer and marketer in the renewable fuel and food ingredients sectors. The company operates primarily in the production of specialty alcohols and essential ingredients used in a wide range of products including food, beverage, health, and industrial applications. Alto Ingredients is focused on leveraging its large-scale production capabilities to provide high-quality, sustainable products to its diverse customer base, including major food and beverage companies, and industrial manufacturers.
How the Company Makes MoneyAlto Ingredients generates revenue primarily through the sale of its specialty alcohols and essential ingredients. Key revenue streams include the production and sale of ethanol, which is used as a renewable fuel and a component in various industrial applications. Additionally, the company earns revenue from the sale of high-quality alcohols and byproducts to food and beverage manufacturers, as well as health and industrial companies. Alto Ingredients' earnings are supported by strategic partnerships and contracts with major corporations that require consistent, large-scale supply of these essential products. Its production facilities' strategic locations also play a role in optimizing distribution and reducing costs, contributing to its overall profitability.

Alto Ingredients Earnings Call Summary

Earnings Call Date:May 07, 2025
(Q1-2025)
|
% Change Since: 37.21%|
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 Financial Statement Overview

Summary
Alto Ingredients is experiencing financial difficulties, with declining revenues and net losses. Despite a moderate debt level, profitability and cash generation remain concerns, necessitating strategic adjustments.
Income Statement
35
Negative
Alto Ingredients has faced declining revenues and profitability. The TTM Gross Profit Margin is low at 0.73%, and the Net Profit Margin is negative at -6.20%, indicating operational challenges. Revenue has decreased by 2.52% from the previous year, and EBIT and EBITDA margins are negative, underscoring profitability issues.
Balance Sheet
55
Neutral
The company maintains a moderate Debt-to-Equity Ratio of 0.61, reflecting balanced leverage. However, Stockholders' Equity has decreased over recent periods. The Equity Ratio stands at 53.17%, suggesting a solid equity base relative to total assets. Return on Equity (ROE) is not positive due to net losses, indicating inefficiencies in generating profits from equity.
Cash Flow
40
Negative
Alto's Free Cash Flow has deteriorated, with a significant negative Free Cash Flow Growth Rate. The Operating Cash Flow to Net Income Ratio is -0.39, reflecting cash generation issues. Free Cash Flow to Net Income Ratio is negative, showing cash flow challenges in covering losses.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue965.26M1.22B1.34B1.21B897.02M
Gross Profit9.72M15.65M-27.55M67.78M52.86M
EBITDA-26.76M2.60M-12.75M61.89M51.15M
Net Income-58.98M-28.00M-41.60M46.08M-17.28M
Balance Sheet
Total Assets401.44M454.24M478.32M484.95M476.82M
Cash, Cash Equivalents and Short-Term Investments35.47M30.01M36.46M50.61M47.67M
Total Debt114.67M105.46M87.27M63.65M108.23M
Total Liabilities176.38M174.68M170.23M139.74M180.58M
Stockholders Equity225.06M279.56M308.09M345.21M296.24M
Cash Flow
Free Cash Flow-14.59M-7.51M-31.70M10.44M65.20M
Operating Cash Flow-3.52M22.02M6.05M26.82M71.78M
Investing Cash Flow-13.47M-33.03M-37.66M27.12M23.32M
Financing Cash Flow7.72M6.96M19.01M-40.00M-66.42M

Alto Ingredients Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.18
Price Trends
50DMA
1.10
Positive
100DMA
1.08
Positive
200DMA
1.34
Negative
Market Momentum
MACD
0.03
Positive
RSI
50.83
Neutral
STOCH
46.67
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 1.18 is below the 20-day moving average (MA) of 1.21, above the 50-day MA of 1.10, and below the 200-day MA of 1.34, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 50.83 is Neutral, neither overbought nor oversold. The STOCH value of 46.67 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 (44)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
69
Neutral
$881.91M16.7810.68%-18.36%-13.81%
64
Neutral
$670.14M29.245.08%0.87%-4.09%-66.97%
56
Neutral
$359.34M-16.11%145.38%-22.02%
56
Neutral
$527.77M-12.34%-19.82%-34.91%
52
Neutral
$91.11M-24.43%-17.27%-112.62%
44
Neutral
C$980.54M-6.83-13.68%1.75%17.37%-32.98%
42
Neutral
$106.59M103.25%1.35%-5.28%51.91%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ALTO
Alto Ingredients
1.18
-0.38
-24.36%
GEVO
Gevo
1.47
0.88
149.15%
GPRE
Green Plains
8.30
-9.25
-52.71%
KOP
Koppers Holdings
34.59
-4.88
-12.36%
REX
Rex American
54.12
5.72
11.82%
TSE
Trinseo
2.96
0.27
10.04%

Alto Ingredients Corporate Events

Delistings and Listing ChangesRegulatory Filings and Compliance
Alto Ingredients Regains Nasdaq Compliance
Positive
Jun 27, 2025

On June 23, 2025, Alto Ingredients, Inc. received a notification from Nasdaq confirming that the company’s stock price had met the minimum requirement of $1.00 per share for 10 consecutive business days, thus regaining compliance with Nasdaq’s listing rules. This development ensures the company’s continued listing on the Nasdaq Stock Market, which is crucial for maintaining investor confidence and market presence.

The most recent analyst rating on (ALTO) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Alto Ingredients stock, see the ALTO Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Alto Ingredients Approves Key Proposals at Annual Meeting
Neutral
Jun 25, 2025

On June 25, 2025, Alto Ingredients, Inc. held its Annual Meeting of Stockholders, where several key proposals were approved. The meeting resulted in the election of six directors, approval of executive compensation, a recommendation for the frequency of advisory votes on executive compensation, and the ratification of RSM US LLP as the independent accounting firm for 2025.

The most recent analyst rating on (ALTO) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Alto Ingredients stock, see the ALTO Stock Forecast page.

Delistings and Listing ChangesStock Split
Alto Ingredients Faces Nasdaq Delisting Notice
Negative
May 23, 2025

On May 19, 2025, Alto Ingredients, Inc. received a notification from Nasdaq indicating that its stock price had fallen below the minimum required for continued listing. The company has until November 15, 2025, to regain compliance by ensuring its stock price closes at or above $1.00 for at least 10 consecutive business days. If unsuccessful, Alto may qualify for an additional 180-day period to meet the requirements, potentially involving a reverse stock split. Failure to comply could result in delisting, though the company can appeal such a decision.

The most recent analyst rating on (ALTO) stock is a Buy with a $5.50 price target. To see the full list of analyst forecasts on Alto Ingredients stock, see the ALTO Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 26, 2025