Montauk Renewables (MNTK) AI Stock Analysis

• Market Cap: $290.20M
• Dividend Yield: N/A
• Average Volume (3M): 164.75K
• Price to Earnings (P/E): 110.7
• Beta (1Y): 1.67
• Revenue Growth: -1.78%
• EPS Growth: -85.80%
• Country: US
• Employees: 166
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Diversified Utilities
• EPS (TTM): -0.04
• Shares Outstanding: 142,256,620
• 10 Day Avg. Volume: 188,485
• 30 Day Avg. Volume: 164,754
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.26
• Enterprise Value/Revenue: 2.01
• Enterprise Value/Gross Profit: 4.82
• Enterprise Value/Ebitda: 9.94
• 1Y Price Target: $4.25
• Price Target Upside: 110.40% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 56 Neutral
• Price Target: $2.00 ▼(-0.99% Downside)

Montauk Renewables' overall stock score is driven by strong revenue growth but is hampered by declining profitability and cash flow issues. The technical analysis suggests a bearish trend, and the high P/E ratio indicates overvaluation. The earnings call provides a cautious outlook with both positive initiatives and financial challenges.

Montauk Renewables Business Overview & Revenue Model

Company Description

Montauk 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 Money

Montauk 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 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

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

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

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.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	181.34M	175.74M	174.90M	205.56M	148.13M	100.38M
Gross Profit	75.72M	77.57M	80.28M	104.13M	69.97M	38.64M
EBITDA	36.73M	40.97M	45.12M	65.73M	25.43M	25.06M
Net Income	2.65M	9.73M	14.95M	35.19M	-4.53M	4.60M
Balance Sheet
Total Assets	382.49M	349.01M	350.24M	332.32M	286.48M	253.36M
Cash, Cash Equivalents and Short-Term Investments	29.13M	45.62M	73.81M	105.18M	53.27M	20.99M
Total Debt	76.52M	62.91M	68.09M	76.22M	79.53M	66.36M
Total Liabilities	127.78M	91.60M	100.00M	105.22M	104.19M	93.73M
Stockholders Equity	254.71M	257.42M	250.24M	227.09M	182.29M	159.62M
Cash Flow
Free Cash Flow	-19.38M	-18.53M	-22.04M	58.79M	32.89M	11.04M
Operating Cash Flow	46.66M	43.80M	41.05M	81.07M	42.88M	28.68M
Investing Cash Flow	-68.08M	-62.19M	-63.09M	-20.79M	-19.47M	-15.99M
Financing Cash Flow	8.20M	-9.84M	-9.33M	-8.28M	8.65M	-1.50M

Montauk Renewables Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.02
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 2.02 is below the 20-day moving average (MA) of 2.07, below the 50-day MA of 2.11, and below the 200-day MA of 2.73, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 46.40 is Neutral, neither overbought nor oversold. The STOCH value of 31.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MNTK.

Montauk Renewables Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CIG	79 Outperform	6.59B	5.08	26.00%	15.21%	-3.27%	-3.44%
BKH	77 Outperform	4.42B	15.13	7.82%	4.40%	5.41%	-1.89%
ELP	72 Outperform	6.85B	13.22	11.89%	5.87%	-5.28%	14.50%
ALE	62 Neutral	3.85B	20.74	6.42%	4.37%	-0.44%	-17.46%
AES	58 Neutral	9.43B	9.20	46.27%	5.29%	-3.19%	30.48%
MNTK	56 Neutral	$290.20M	110.70	1.04%	―	-1.78%	-85.80%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%