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Montauk Renewables (MNTK)
NASDAQ:MNTK
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Montauk Renewables (MNTK) AI Stock Analysis

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MNTK

Montauk Renewables

(NASDAQ:MNTK)

Rating:58Neutral
Price Target:
$2.50
▲(21.36% Upside)
Montauk Renewables' overall stock score reflects strong revenue growth but is weighed down by declining profitability, high valuation, and mixed earnings call sentiment. The technical indicators suggest limited momentum, and the high P/E ratio indicates potential overvaluation.

Montauk Renewables (MNTK) vs. SPDR S&P 500 ETF (SPY)

Montauk Renewables Business Overview & Revenue Model

Company DescriptionMontauk Renewables, Inc., a renewable energy company, engages in recovery and processing of biogas from landfills and other non-fossil fuel sources. It operates in two segments, Renewable Natural Gas and Renewable Electricity Generation. The company develops, owns, and operates renewable natural gas (RNG) projects that capture methane and prevents it from being released into the atmosphere by converting it into either RNG or electrical power for the electrical grid. Its customers for RNG and renewable identification numbers (RIN) include long-term owner-operators of landfills and livestock farms, local utilities, and refiners in the natural gas and refining sectors. The company was founded in 1980 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyMontauk Renewables generates revenue through the production and sale of renewable natural gas (RNG) and renewable electricity, which are derived from biogas collected from landfills and other agricultural sources. The company benefits from various environmental credits and incentives provided by governmental and regulatory bodies aimed at promoting clean energy. Montauk also engages in long-term partnerships and contracts with utility companies and other energy consumers to ensure a stable and consistent revenue stream. A significant portion of its earnings is derived from state and federal programs such as the Renewable Fuel Standard (RFS) in the U.S., which mandates the inclusion of renewable fuels in transportation fuel.

Montauk Renewables Earnings Call Summary

Earnings Call Date:Aug 06, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 18, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of positive developments, such as revenue increases and new joint ventures, alongside negative financial results and increased expenses. The highlights show strategic growth initiatives, but financial metrics like operating income and RIN pricing are down. This balance suggests a cautious outlook.
Q2-2025 Updates
Positive Updates
Revenue Increase
Total revenues in the second quarter of 2025 were $45.1 million, an increase of $1.8 million or 4.1% compared to $43.3 million in the second quarter of 2024.
Joint Venture Formation
Formed a joint venture, GreenWave Energy Partners, with Pioneer Renewables Energy Marketing to address limited capacity of RNG utilization for transportation.
CO2 Delivery Contract
Signed a contract for the annual delivery of 140,000 tons per year of biogenic carbon dioxide, estimated to generate $170 million to $201 million in total revenue over 15 years.
Completion of Second RNG Facility
Successfully completed the construction and commissioning of a second RNG processing facility at the Apex landfill, adding 2,100 MMBtu per day of production capacity.
Negative Updates
Decrease in RNG Operating Income
RNG operating income for the second quarter of 2025 was $9.2 million, a decrease of $2.5 million or 21.2% compared to $11.7 million for the second quarter of 2024.
Decreased RIN Pricing
Average pricing realized on RIN sales during the second quarter of 2025 was $2.42 compared to $3.12 during the second quarter of 2024, a decrease of approximately 22.4%.
Operating Loss
Operating loss for the second quarter of 2025 was $2.4 million, a decrease of $3.3 million compared to an operating income of $0.9 million for the second quarter of 2024.
Increased Expenses
Operating and maintenance expenses for RNG facilities during the second quarter of 2025 were $17.0 million, an increase of $3.1 million or 22% compared to $13.9 million during the second quarter of 2024.
Company Guidance
During Montauk Renewables' second quarter 2025 earnings call, the company provided detailed guidance across various metrics. Montauk reaffirmed its full-year 2025 outlook, projecting RNG production volumes between 5.8 million and 6 million MMBtus, with corresponding revenues ranging from $150 million to $170 million. They also expect Renewable Electricity production volumes to fall between 178,000 and 186,000 megawatt hours, generating revenues between $17 million and $18 million. The company's adjusted EBITDA for Q2 2025 was reported at $5.0 million, a decrease of 28.6% from the previous year. Additionally, Montauk's net loss for the quarter increased to $5.5 million, compared to $0.7 million in Q2 2024. The call highlighted the impact of regulatory developments on RIN pricing and introduced new ventures, such as GreenWave Energy Partners, aimed at expanding RNG transportation pathways. The company's ongoing projects, including the North Carolina Ag swine project and CO2 processing initiatives, were also discussed as key growth opportunities.

Montauk Renewables Financial Statement Overview

Summary
Montauk Renewables shows strong revenue growth but declining profitability margins and cash flow challenges. The balance sheet is stable with moderate leverage, but the decline in return on equity suggests challenges in generating returns for shareholders.
Income Statement
65
Positive
Montauk Renewables shows a mixed performance in its income statement. The TTM (Trailing-Twelve-Months) revenue growth rate is strong at 99.6%, indicating a significant increase in sales. However, the gross profit margin has decreased over time, from 50.7% in 2022 to 41.8% in the TTM, suggesting rising costs or pricing pressures. The net profit margin has also declined from 17.1% in 2022 to 1.5% in the TTM, reflecting reduced profitability. EBIT and EBITDA margins have similarly decreased, indicating challenges in maintaining operational efficiency.
Balance Sheet
72
Positive
The balance sheet of Montauk Renewables is relatively stable. The debt-to-equity ratio is moderate at 0.30 in the TTM, showing a conservative use of leverage. Return on equity has decreased from 15.5% in 2022 to 1.0% in the TTM, indicating a decline in profitability relative to shareholder equity. The equity ratio remains healthy, suggesting a solid capital structure with a good proportion of assets financed by equity.
Cash Flow
58
Neutral
Cash flow analysis reveals some concerns. The free cash flow is negative in the TTM, although there is a notable improvement in free cash flow growth rate. The operating cash flow to net income ratio is below 1, indicating that operating cash flow is not fully covering net income, which could be a risk if sustained. The negative free cash flow to net income ratio highlights challenges in generating free cash flow relative to earnings.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue181.34M175.74M174.90M205.56M148.13M100.38M
Gross Profit75.72M77.57M80.28M104.13M69.97M38.64M
EBITDA36.73M40.97M45.12M65.73M25.43M25.06M
Net Income2.65M9.73M14.95M35.19M-4.53M4.60M
Balance Sheet
Total Assets382.49M349.01M350.24M332.32M286.48M253.36M
Cash, Cash Equivalents and Short-Term Investments29.13M45.62M73.81M105.18M53.27M20.99M
Total Debt76.52M62.91M68.09M76.22M79.53M66.36M
Total Liabilities127.78M91.60M100.00M105.22M104.19M93.73M
Stockholders Equity254.71M257.42M250.24M227.09M182.29M159.62M
Cash Flow
Free Cash Flow-19.38M-18.53M-22.04M58.79M32.89M11.04M
Operating Cash Flow46.66M43.80M41.05M81.07M42.88M28.68M
Investing Cash Flow-68.08M-62.19M-63.09M-20.79M-19.47M-15.99M
Financing Cash Flow8.20M-9.84M-9.33M-8.28M8.65M-1.50M

Montauk Renewables Technical Analysis

Technical Analysis Sentiment
Negative
Last Price2.06
Price Trends
50DMA
2.18
Negative
100DMA
2.15
Negative
200DMA
2.90
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
46.32
Neutral
STOCH
30.15
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MNTK, the sentiment is Negative. The current price of 2.06 is above the 20-day moving average (MA) of 2.06, below the 50-day MA of 2.18, and below the 200-day MA of 2.90, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 46.32 is Neutral, neither overbought nor oversold. The STOCH value of 30.15 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MNTK.

Montauk Renewables Risk Analysis

Montauk Renewables disclosed 48 risk factors in its most recent earnings report. Montauk Renewables reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Montauk Renewables Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
79
Outperform
$6.37B4.9322.94%15.50%-3.27%-3.44%
77
Outperform
$4.35B15.048.13%4.49%5.41%-1.89%
72
Outperform
$6.40B12.369.81%6.23%-5.28%14.50%
65
Neutral
$9.55B9.4721.17%5.47%-3.19%30.48%
62
Neutral
$3.70B20.126.46%4.54%-0.44%-17.46%
62
Neutral
$10.27B6.370.76%2.91%3.10%-36.03%
58
Neutral
$297.32M112.831.04%-1.78%-85.80%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
MNTK
Montauk Renewables
2.06
-2.35
-53.29%
ALE
Allete
63.70
2.98
4.91%
BKH
Black Hills
59.69
2.62
4.59%
CIG
Companhia Energetica Minas Gerais
2.04
0.15
7.94%
ELP
Companhia Paranaense de Energia Pfd
8.96
1.65
22.57%
AES
AES
12.93
-2.35
-15.38%

Montauk Renewables Corporate Events

Executive/Board ChangesShareholder Meetings
Montauk Renewables Holds 2025 Annual Stockholders Meeting
Neutral
May 27, 2025

On May 22, 2025, Montauk Renewables, Inc. conducted its 2025 Annual Meeting of Stockholders, where two director nominees, Theventheran G. Govender and Yunis Shaik, were elected to the Board for terms expiring in 2028. Additionally, the stockholders ratified the appointment of Grant Thornton LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025, indicating continued confidence in the company’s financial oversight.

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: Sep 03, 2025