Montauk Renewables (MNTK) AI Stock Analysis

• Market Cap: $224.77M
• Dividend Yield: N/A
• Average Volume (3M): 163.10K
• Price to Earnings (P/E): ―
• Beta (1Y): 1.67
• Revenue Growth: -17.54%
• EPS Growth: -139.94%
• 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: 154,520
• 30 Day Avg. Volume: 163,104
• PEG Ratio: -1.54
• Price to Book (P/B): 2.20
• Price to Sales (P/S): 3.22
• P/FCF Ratio: -30.56
• Enterprise Value/Market Cap: 1.58
• Enterprise Value/Revenue: 2.20
• Enterprise Value/Gross Profit: 6.35
• Enterprise Value/Ebitda: 14.56
• 1Y Price Target: $4.00
• Price Target Upside: 86.92% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 48 Neutral
• Price Target: $2.00 ▼(-6.54% Downside)

Montauk Renewables faces significant financial challenges, with declining revenue and profitability impacting its financial performance score. The technical analysis indicates a bearish trend, and the valuation is unattractive due to a negative P/E ratio and lack of dividend yield. The earnings call provided some strategic positives but was overshadowed by financial declines, contributing to a mixed sentiment. These factors combine to result in a below-average overall stock score.

Positive Factors

Renewable Natural Gas Production Increase

The increase in RNG production indicates Montauk's ability to enhance its operational capacity, which can lead to higher future revenues and market share in the renewable energy sector.

Renewable Electricity Generation Growth

Growth in renewable electricity generation reflects Montauk's expanding capabilities in clean energy production, supporting long-term revenue diversification and sustainability.

Formation of GreenWave Energy Partners

The joint venture with Pioneer Renewables enhances Montauk's market reach and utilization of RNG, potentially increasing demand and creating new revenue streams.

Negative Factors

Significant Revenue Decrease

The substantial revenue decline highlights challenges in maintaining sales momentum, which could impact Montauk's financial stability and growth prospects.

Decline in RIN Prices

Falling RIN prices reduce the profitability of Montauk's RNG sales, potentially affecting margins and financial performance if the trend continues.

Operating Income Reduction

The sharp drop in operating income indicates operational inefficiencies and cost pressures, which may hinder Montauk's ability to invest in growth initiatives.

Montauk Renewables Business Overview & Revenue Model

Company Description

Montauk Renewables (MNTK) is a leading renewable energy company focused on the production and marketing of renewable natural gas (RNG) derived from organic waste. The company operates in the renewable energy sector, primarily converting landfill gas and other organic materials into clean energy solutions. Montauk's core products include RNG, which is sold to utilities and other customers, as well as environmental attributes associated with their energy production, contributing to a more sustainable energy landscape.

How the Company Makes Money

Montauk Renewables generates revenue primarily through the sale of renewable natural gas (RNG) produced from organic waste sources, such as landfills and agricultural byproducts. The company capitalizes on various revenue streams, including the direct sale of RNG to utilities and industrial customers, as well as the monetization of environmental credits associated with its production processes, such as Renewable Identification Numbers (RINs) under the Renewable Fuel Standard (RFS). Additionally, Montauk may engage in long-term contracts with customers, providing stable revenue streams. Strategic partnerships with waste management companies and energy providers further enhance its market reach and profitability, as these collaborations can create synergies in waste processing and energy distribution.

Montauk Renewables Financial Statement Overview

Summary

Montauk Renewables faces challenges with declining revenue and profitability, as evidenced by negative growth rates and margins. The balance sheet remains stable with moderate leverage, but cash flow issues are evident with negative free cash flow growth. The company needs to address operational inefficiencies and improve cash flow management to enhance financial performance.

Income Statement

Montauk Renewables has shown a decline in revenue growth with a negative growth rate of -11.39% in the TTM period, indicating potential challenges in maintaining sales momentum. The gross profit margin has decreased slightly from previous years, reflecting potential cost pressures. The net profit margin is low at 1.46% in the TTM, and EBIT margin has turned negative, suggesting operational inefficiencies. However, the company maintains a reasonable EBITDA margin of 20.25%, indicating some level of operational cash flow generation.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.30 in the TTM, indicating a balanced approach to leverage. Return on equity has decreased to 1.01%, reflecting lower profitability on shareholders' equity. The equity ratio remains stable, suggesting a solid capital structure. Overall, the balance sheet shows stability but with reduced profitability.

Cash Flow

Montauk Renewables has experienced a significant decline in free cash flow, with a negative growth rate of 175.39% in the TTM, indicating cash flow challenges. The operating cash flow to net income ratio is 0.84, showing a decrease in cash generation efficiency. The negative free cash flow to net income ratio highlights the company's struggle to convert earnings into free cash flow.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	160.68M	175.74M	174.90M	205.56M	148.13M	100.38M
Gross Profit	55.74M	77.57M	80.28M	104.13M	69.97M	38.64M
EBITDA	24.31M	40.97M	45.12M	65.73M	25.43M	25.06M
Net Income	-9.20M	9.73M	14.95M	35.19M	-4.53M	4.60M
Balance Sheet
Total Assets	383.31M	349.01M	350.24M	332.32M	286.48M	253.36M
Cash, Cash Equivalents and Short-Term Investments	6.77M	45.62M	73.81M	105.18M	53.27M	20.99M
Total Debt	72.97M	62.91M	68.09M	76.22M	79.53M	66.36M
Total Liabilities	122.58M	91.60M	100.00M	105.22M	104.19M	93.73M
Stockholders Equity	260.73M	257.42M	250.24M	227.09M	182.29M	159.62M
Cash Flow
Free Cash Flow	-53.37M	-18.53M	-22.04M	58.79M	32.89M	11.04M
Operating Cash Flow	30.72M	43.80M	41.05M	81.07M	42.88M	28.68M
Investing Cash Flow	-87.28M	-62.19M	-63.09M	-20.79M	-19.47M	-15.99M
Financing Cash Flow	8.33M	-9.84M	-9.33M	-8.28M	8.65M	-1.50M

Montauk Renewables Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 2.14
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 2.14 is above the 20-day moving average (MA) of 1.76, above the 50-day MA of 1.79, and above the 200-day MA of 2.05, indicating a bearish trend. The MACD of -0.06 indicates Positive momentum. The RSI at 37.56 is Neutral, neither overbought nor oversold. The STOCH value of 8.72 is Positive, 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	70 Outperform	$6.37B	8.25	13.35%	12.98%	-0.38%	-53.94%
BIP	69 Neutral	$15.54B	52.79	6.28%	4.92%	8.14%	―
ELPC	67 Neutral	$7.08B	18.31	8.00%	5.43%	1.96%	-35.00%
AES	65 Neutral	$10.13B	8.72	23.02%	5.06%	-1.55%	12.83%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
MNTK	48 Neutral	$224.77M	-24.50	-3.43%	―	-17.54%	-139.94%