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Gevo (GEVO)
NASDAQ:GEVO
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Gevo
(NASDAQ:GEVO)
Rating:48Neutral
Price Target:
$1.00
▼( -9.91% Downside)
Positive Factors
Earnings
Gevo announced its 1Q25 results, with revenue of $29.1M compared to $4.0M in 1Q24, showing a 630% year-over-year increase.
Government Loan
The company has received conditional approval for a $1.6 billion loan from the U.S. Department of Energy, serving as a significant catalyst for growth.
Tax Incentives
Gevo is positioned as a potential beneficiary of the latest House Republican tax proposal that includes an extension of the 45Z tax credit through the end of 2031, a significant positive for the industry.
Negative Factors
Operational Risk
The company is now meaningfully de-risked with respect to cash outflow expectations that were tied largely to progressing the Alcohol-to-Jet 60 (ATJ-60) initiative.
Gevo (GEVO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$265.91M
Dividend YieldN/A
Average Volume (3M)2.56M
Price to Earnings (P/E)―
Beta (1Y)2.08
Revenue Growth145.38%
EPS Growth-22.02%
CountryUS
Employees122
SectorBasic Materials
Sector Strength64
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)-0.09
Shares Outstanding239,562,990
10 Day Avg. Volume2,979,893
30 Day Avg. Volume2,555,208
Financial Highlights & Ratios
PEG Ratio1.15
Price to Book (P/B)0.60
Price to Sales (P/S)0.00
P/FCF Ratio-2.95
Enterprise Value/Market Cap0.87
Enterprise Value/Revenue2.50
Enterprise Value/Gross Profit-157.80
Enterprise Value/Ebitda-0.93
Forecast
1Y Price Target
$9.25Price Target Upside733.33% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Gevo Business Overview & Revenue Model
Company DescriptionGevo, Inc. operates as a renewable fuels company. It operates through four segments: Gevo, Agri-Energy, Renewable Natural Gas, and Net-Zero. The company commercializes gasoline, jet fuel, and diesel fuel to achieve zero carbon emissions, and reduce greenhouse gas emissions with sustainable alternatives. Its products also include renewable gasoline and diesel, isooctane, isobutanol, sustainable aviation fuel, renewable natural gas, isobutylene, ethanol, and animal feed and protein. Gevo, Inc. has a strategic alliance with Axens North America, Inc. for ethanol-to-jet technology and sustainable aviation fuel commercial project development. The company was formerly known as Methanotech, Inc. and changed its name to Gevo, Inc. in March 2006. Gevo, Inc. was incorporated in 2005 and is headquartered in Englewood, Colorado.
How the Company Makes MoneyGevo makes money through the production and sale of renewable fuels and chemicals. The company's revenue model is primarily based on the sale of isobutanol, ethanol, and renewable hydrocarbons to customers in the transportation and petrochemical industries. Gevo's key revenue streams include its proprietary production processes for converting renewable resources into high-value chemicals and fuels. Additionally, the company engages in strategic partnerships and licensing agreements to enhance its production capabilities and expand market reach. Government incentives, renewable energy mandates, and carbon credit markets also play a significant role in supporting Gevo's earnings by providing financial benefits for the adoption of sustainable technologies.
Gevo Financial Statement Overview
Summary
Gevo faces substantial challenges across its financial metrics, with persistent losses and cash flow difficulties. While the balance sheet shows a stable equity position, the income and cash flow statements highlight critical areas of concern, requiring strategic improvements to achieve financial stability and growth.Income Statement
Gevo has shown a volatile revenue trend, with a significant revenue decrease in recent years and a notable decline from 2023 to 2024. The gross profit margin is erratic, and net profit margins are consistently negative, highlighting ongoing operational challenges. Additionally, both EBIT and EBITDA margins are negative, indicating unprofitability at the operational level.35
Negative
Balance Sheet
The company maintains a strong equity position relative to its assets, with a high equity ratio. However, the debt-to-equity ratio indicates manageable debt levels, though historical fluctuations suggest potential financial instability. Despite negative net income, the return on equity is not calculable due to negative earnings, illustrating a need for improved profitability.45
Neutral
Cash Flow
Gevo's cash flow analysis reveals negative free cash flow growth and operating cash flow, reflecting challenges in generating cash from operations. The ratios of operating and free cash flow to net income are unfavorable, indicating inefficiencies in cash conversion and potential liquidity issues.40
Negative
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 42.03M | 16.91M | 17.20M | 1.18M | 711.00K | 5.31M | Gross Profit |
| -1.47M | 4.91M | -13.56M | -7.52M | -11.45M | -9.69M | EBIT |
| -87.82M | -90.82M | -81.83M | -102.69M | -60.09M | -26.34M | EBITDA |
| -61.24M | -56.46M | -62.83M | -88.95M | -53.82M | -32.13M | Net Income Common Stockholders |
| -81.49M | -78.64M | -66.22M | -118.58M | -59.38M | -39.15M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 65.29M | 189.39M | 298.35M | 404.53M | 316.17M | 78.34M | Total Assets |
| 677.80M | 583.94M | 650.32M | 700.75M | 666.48M | 152.10M | Total Debt |
| 4.35M | 70.62M | 70.18M | 69.69M | 90.85M | 1.27M | Net Debt |
| -60.94M | -118.77M | -228.17M | -167.43M | 50.01M | -77.07M | Total Liabilities |
| 203.01M | 94.45M | 92.93M | 95.27M | 119.22M | 5.72M | Stockholders Equity |
| 469.84M | 489.49M | 557.39M | 605.48M | 547.25M | 146.38M |
| Cash Flow | Free Cash Flow | ||||
| -98.93M | -108.47M | -108.17M | -128.40M | -112.37M | -25.24M | Operating Cash Flow |
| -65.35M | -57.38M | -53.72M | -52.61M | -43.54M | -19.34M | Investing Cash Flow |
| -238.60M | -51.82M | 114.13M | 93.39M | -411.62M | -5.91M | Financing Cash Flow |
| 98.33M | -7.36M | -189.00K | 138.56M | 512.85M | 87.28M |
Gevo Technical Analysis
Negative
1.11
Price Trends
1.16
Negative
1.48
Negative
1.51
Negative
Market Momentum
-0.01
Positive
46.43
Neutral
10.57
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GEVO, the sentiment is Negative. The current price of 1.11 is below the 20-day moving average (MA) of 1.13, below the 50-day MA of 1.16, and below the 200-day MA of 1.51, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 46.43 is Neutral, neither overbought nor oversold. The STOCH value of 10.57 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GEVO.
Gevo Risk Analysis
Gevo disclosed 50 risk factors in its most recent earnings report. Gevo 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 1 New Risks
1.
Mergers, acquisitions and other strategic investments may not be successful in achieving intended benefits, cost savings and synergies and may disrupt current operations. Q3, 2024
Gevo 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 | $690.89M | 12.63 | 10.83% | ― | -23.12% | -4.89% | |
68 Neutral | $1.23B | 22.20 | 4.65% | 2.79% | -0.16% | 47.70% | |
67 Neutral | $755.79M | 7.85 | 11.87% | 5.17% | 10.42% | ― | |
50 Neutral | $1.99B | -1.06 | -21.34% | 3.71% | 2.03% | -30.65% | |
49 Neutral | $275.33M | ― | -12.34% | ― | -19.82% | -34.91% | |
48 Neutral | $265.91M | ― | -16.11% | ― | 145.38% | -22.02% | |
45 Neutral | $74.89M | ― | -24.43% | ― | -17.27% | -112.62% |
* Basic Materials Sector Average
Performance Comparison
GEVO
Gevo
1.11
0.41
58.57%
GPRE
Green Plains
4.21
-13.83
-76.66%
KRO
Kronos Worldwide
6.57
-7.18
-52.22%
ALTO
Alto Ingredients
0.97
-0.52
-34.90%
REX
Rex American
41.58
-12.32
-22.86%
SCL
Stepan Company
54.43
-29.47
-35.13%
Gevo Earnings Call Summary
Earnings Call Date:May 13, 2025
(Q1-2025)
| % Change Since: -10.48%|
Next Earnings Date:Aug 07, 2025
Earnings Call Sentiment Neutral
The earnings call for Gevo Incorporated highlighted significant revenue growth and strategic advancements, particularly with the Gevo North Dakota acquisition and the 45Z tax credit monetization. However, the company still faces financial losses and some uncertainty regarding DOE loan timelines and legislative changes. While the positive developments suggest a promising trajectory, the challenges indicate that Gevo must navigate financial and operational hurdles to maintain its momentum.Q1-2025 Updates
Positive Updates
Revenue Growth and Positive EBITDA Outlook
Generated $29 million in revenue in Q1 2025 with only two months of operations at Gevo North Dakota. The company anticipates being EBITDA positive this year, indicating a strong growth trajectory.
Gevo North Dakota Performance
Gevo North Dakota produced over 11 million gallons of low carbon ethanol, over 40,000 tons of high protein animal feed, and 3 million pounds of corn oil in just two months, showcasing strong operational performance.
Positive Market Reception and Strategic Partnerships
Signed a groundbreaking offtake agreement with Future Energy Global, highlighting the market's recognition of Gevo's carbon attributes and expanding its market reach.
45Z Tax Credit Approval and Monetization
Received IRS approval to apply for the 45Z tax credit, expected to significantly boost EBITDA growth. Gevo North Dakota is one of only two ethanol plants benefiting from this credit.
Carbon Abatement Success
Captured and sequestered 29,000 metric tons of CO2, generating over 100,000 metric tons of carbon abatement last quarter, positioning Gevo as a leader in carbon sequestration.
Negative Updates
Operating Loss and Cash Flow Challenges
Company-wide consolidated loss from operations was $20.1 million last quarter, with a non-GAAP adjusted EBITDA loss of $15.4 million, indicating ongoing financial challenges despite revenue growth.
Uncertain DOE Loan Timeline
The timeline for the Department of Energy loan for the ATJ60 project remains uncertain, potentially affecting project financing and development.
Market Noise and Legislative Uncertainty
Gevo faces significant market noise and legislative uncertainty, particularly around the 45Z tax credit and indirect land use changes, which could impact future financials.
Company Guidance
During Gevo Inc.'s first quarter 2025 earnings call, CEO Patrick Gruber provided guidance emphasizing a promising outlook driven by several key metrics. In Q1 2025, Gevo generated $29 million in revenue with just two months of operations at Gevo North Dakota, which produced 11 million gallons of low-carbon ethanol. The company reported a consolidated operating revenue and net income of $30.9 million and ended the quarter with $135 million in cash and equivalents. For the two months of operation, Gevo North Dakota achieved an income from operations of $0.5 million and an adjusted EBITDA of $1.8 million. Furthermore, Gruber highlighted the company's successful integration of carbon sequestration initiatives, with 29,000 metric tons of carbon dioxide sequestered and a low carbon intensity score of about 20, which positions the company well for monetizing the 45Z tax credits. Gruber expressed confidence in achieving positive EBITDA for the full year, driven by the anticipated benefits from the 45Z tax credits and improved profitability from renewable natural gas (RNG) operations, which generated $5.7 million in revenue, reflecting an increase of $1.7 million compared to the previous year.Gevo Corporate Events
Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Gevo Expands with Strategic Acquisition and Financing
Positive
Feb 3, 2025
On January 31, 2025, Gevo, Inc. completed the acquisition of Red Trail Energy, LLC’s assets, including an ethanol production plant and carbon capture and sequestration assets, for $210 million. This strategic acquisition, which is part of Gevo’s Net-Zero North initiative, aims to enhance Gevo’s portfolio by transforming the acquired site into a sustainable aviation fuel facility and leveraging the carbon sequestration capabilities to support future projects. The transaction was financed through a combination of Gevo’s equity and a $105 million term loan from Orion Infrastructure Capital, which also invested $5 million in equity at Net-Zero North.
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.