OPAL Fuels (OPAL) AI Stock Analysis

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OPAL Fuels

(NASDAQ:OPAL)

Rating:60Neutral

Price Target:

$3.50

▲(12.90%Upside)

OPAL Fuels exhibits strong revenue and EBITDA growth, supported by positive technical momentum. However, high valuation, regulatory uncertainties, and financial leverage pose risks. The company needs to address profitability margins and capital expenditures to improve its financial standing.

OPAL Fuels (OPAL) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$537.45M

Dividend YieldN/A

Average Volume (3M)268.10K

Price to Earnings (P/E)127.6

Beta (1Y)1.45

Revenue Growth16.30%

EPS Growth-96.72%

CountryUS

Employees341

SectorUtilities

Sector Strength83

IndustryRegulated Gas

Share Statistics

EPS (TTM)-0.01

Shares Outstanding28,971,882

10 Day Avg. Volume152,600

30 Day Avg. Volume268,103

Financial Highlights & Ratios

PEG Ratio-1.35

Price to Book (P/B)-0.28

Price to Sales (P/S)0.00

P/FCF Ratio-1.41

Enterprise Value/Market Cap0.61

Enterprise Value/Revenue0.27

Enterprise Value/Gross Profit3.05

Enterprise Value/Ebitda1.65

Forecast

1Y Price Target

$4.00

Price Target Upside29.03% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering3

OPAL Fuels Business Overview & Revenue Model

Company DescriptionOPAL Fuels (OPAL) is a leading vertically integrated producer and distributor of renewable natural gas (RNG) and renewable electricity in the United States. The company focuses on capturing methane emissions from landfills and converting them into clean, sustainable energy sources. OPAL Fuels operates across various sectors, including transportation, industrial, and commercial markets, providing environmentally friendly energy solutions to reduce carbon footprints and promote sustainability.

How the Company Makes MoneyOPAL Fuels generates revenue primarily through the production and sale of renewable natural gas (RNG). The company captures methane emissions from landfills and agricultural waste, processes it into RNG, and then sells it to various markets, including transportation and commercial sectors. Revenue is also generated through the sale of renewable electricity and environmental credits, such as Renewable Identification Numbers (RINs) and Low Carbon Fuel Standard (LCFS) credits, which are earned through their RNG production and used by companies to meet regulatory compliance. Additionally, OPAL Fuels forms strategic partnerships with waste management companies and municipalities, further enhancing its ability to collect raw methane and expand its production capabilities, thereby increasing its revenue potential.

OPAL Fuels Earnings Call Summary

Earnings Call Date:May 08, 2025

(Q1-2025)

% Change Since: 28.63%|

Next Earnings Date:Aug 06, 2025

Earnings Call Sentiment Positive

The earnings call highlights OPAL Fuels' significant growth in EBITDA, revenue, and RNG production, demonstrating strong performance across its segments. However, challenges persist in regulatory uncertainties and adoption rates in heavy-duty trucking, alongside a decrease in renewable power segment revenue. Despite these obstacles, the company's liquidity and production guidance remain strong.

Q1-2025 Updates

Positive Updates

Significant EBITDA Growth

First quarter adjusted EBITDA was $20.1 million, over 30% higher compared to the same period last year.

Fuel Station Services Segment Performance

First quarter 2025 fuel station services segment EBITDA was approximately $12.5 million, 80% higher versus the first quarter of 2024.

Increase in RNG Fuel Production

RNG fuel production for the quarter was 1.1 million MMBtus, up nearly 40% versus the same period last year.

Revenue and Net Income Growth

Revenue for the quarter was $85 million compared to $64.9 million in the same period last year. Net income was $1.3 million, up from $700,000 in Q1 2024.

Strong Liquidity Position

Total liquidity was $240 million, including over $40 million in cash and cash equivalents, and more than $178 million of undrawn availability under the term credit facility.

Positive Outlook for RNG Production

Maintained 2025 RNG production guidance of 5 million MMBtus to 5.4 million MMBtus, a 37% increase versus 2024.

Negative Updates

Regulatory and Trade Policy Uncertainties

Uncertain macro and regulatory environments are causing delays in investment decisions among customers and partners.

Challenges in Heavy-Duty Trucking Adoption

No acceleration in the adoption of CNG/RNG for heavy-duty trucking due to delays in regulatory clarity and product availability.

Decrease in Equity Method Investments EBITDA

OPAL's share of adjusted EBITDA from equity method investments was $3.4 million for the quarter, down from $6.5 million in Q1 2024.

Renewable Power Segment Revenue Decline

Revenue from the renewable power segment was down due to terminated ISCC pathway contracts in the fourth quarter of last year.

Company Guidance

During the OPAL Fuels First Quarter 2025 Earnings Results Conference Call, the company provided several key metrics and guidance updates. First quarter adjusted EBITDA reached $20.1 million, marking a 30% increase from the previous year, with the fuel station services segment contributing $12.5 million, an 80% rise from the same period last year. RNG fuel production was 1.1 million MMBtus, up 40% year-over-year. For the full year, OPAL Fuels maintained its guidance, expecting adjusted EBITDA between $90 million and $110 million and RNG production between 5.0 to 5.4 million MMBtus. The company also highlighted ongoing projects, including four landfill RNG projects under construction with a combined design capacity of 2.1 million MMBtus. These projects, along with a robust development pipeline, are expected to drive sequential quarterly RNG production growth. Despite some macro and regulatory uncertainties, OPAL Fuels remains optimistic about long-term growth potential, particularly with the introduction of new 15-liter engines and evolving regulatory support for RNG/CNG-powered heavy-duty trucking.

OPAL Fuels Financial Statement Overview

Summary

OPAL Fuels shows strong revenue growth and improving operational efficiency. However, thin net profit margins and persistent negative free cash flow due to high capital expenditures, along with high leverage, remain concerns.

Income Statement

Positive

OPAL Fuels has demonstrated strong revenue growth with a significant increase from $117.7M in 2020 to $320.4M in the TTM period ending March 2025. Gross profit margins have improved over the years, reflecting effective cost management. However, net profit margins remain thin due to consistent operating expenses, despite the rising revenues. The EBITDA margin has shown a positive trajectory, indicating operational efficiency.

Balance Sheet

Negative

The balance sheet shows improvement with positive stockholders' equity in the TTM period, contrasting previous periods of negative equity due to accumulated deficits. The debt-to-equity ratio has improved significantly, reflecting a reduction in debt levels and increased equity. However, the equity ratio remains low, indicating potential risks from high leverage and limited asset financing through equity.

Cash Flow

Neutral

OPAL Fuels has shown improvement in operating cash flow, which has increased over the years, indicating better cash generation from core operations. However, negative free cash flow persists due to high capital expenditures, impacting overall cash health. The operating cash flow to net income ratio suggests that cash generation is aligned with reported earnings, although the company needs to address its capital spending to achieve positive free cash flow.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
320.43M	299.97M	256.11M	235.53M	166.12M	117.71M
	Gross Profit
107.04M	100.12M	72.21M	63.48M	51.06M	27.54M
	EBIT
15.71M	21.22M	7.04M	9.51M	11.03M	-3.37M
	EBITDA
37.96M	40.95M	152.89M	53.13M	21.68M	-12.19M
	Net Income Common Stockholders
11.11M	11.03M	29.95M	3.39M	31.91M	-29.92M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
40.08M	24.31M	48.22M	105.37M	39.31M	12.82M
	Total Assets
884.92M	881.08M	754.61M	644.86M	380.84M	169.46M
	Total Debt
2.72M	310.56M	210.61M	179.65M	229.10M	100.78M
	Net Debt
-37.37M	286.25M	172.26M	139.26M	189.79M	87.96M
	Total Liabilities
5.63M	416.05M	297.12M	267.04M	285.89M	139.00M
	Stockholders Equity
879.29M	-148.45M	-478.81M	-662.46M	30.22M	-25.40M
Cash Flow		Free Cash Flow
-65.55M	-94.21M	-75.56M	-132.76M	-70.79M	-22.65M
	Operating Cash Flow
46.51M	33.03M	38.27M	-1.35M	18.86M	2.29M
	Investing Cash Flow
-102.29M	-134.55M	-74.15M	-184.03M	-117.20M	-22.18M
	Financing Cash Flow
85.42M	84.13M	5.90M	220.55M	125.01M	21.45M

OPAL Fuels Technical Analysis

Technical Analysis Sentiment

Positive

Last Price3.10

Price Trends

50DMA

2.24

Positive

100DMA

2.40

Positive

200DMA

2.99

Positive

Market Momentum

MACD

0.25

Positive

RSI

58.70

Neutral

STOCH

18.14

Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For OPAL, the sentiment is Positive. The current price of 3.1 is above the 20-day moving average (MA) of 3.06, above the 50-day MA of 2.24, and above the 200-day MA of 2.99, indicating a bullish trend. The MACD of 0.25 indicates Positive momentum. The RSI at 58.70 is Neutral, neither overbought nor oversold. The STOCH value of 18.14 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for OPAL.

OPAL Fuels Risk Analysis

OPAL Fuels disclosed 67 risk factors in its most recent earnings report. OPAL Fuels 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

OPAL Fuels Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NWN	71 Outperform	$1.60B	15.77	7.36%	4.93%	3.88%	11.80%
RGCO	70 Outperform	$209.02M	15.75	11.60%	4.09%	9.74%	-1.29%
Sector *	64 Neutral	$8.58B	10.36	4.24%	4.64%	4.07%	-13.04%
SPH	63 Neutral	$1.18B	12.60	14.42%	7.15%	4.02%	-14.66%
OPAL	60 Neutral	$537.45M	127.57	-8.53%	―	16.30%	-96.72%
CTRI	55 Neutral	$1.95B	2,093.33	0.11%	―	―	―
NFE	51 Neutral	$751.25M	11.07	-28.47%	14.60%	-15.03%	-201.87%

* Utilities Sector Average

Performance Comparison

OPAL

OPAL Fuels

3.10

-1.23

-28.41%

NWN

Northwest Gas

39.74

5.94

17.57%

RGCO

Rgc Resources

20.27

0.83

4.27%

SPH

Suburban Propane

18.17

0.14

0.78%

NFE

New Fortress Energy

2.74

-18.36

-87.01%

CTRI

Centuri Holdings, Inc.

21.98

-4.09

-15.69%

OPAL Fuels Corporate Events

Executive/Board ChangesShareholder Meetings

Kevin Fogarty to Leave OPAL Fuels Board

Neutral

Apr 25, 2025

On April 21, 2025, Kevin Fogarty informed OPAL Fuels Inc. that he will not seek re-election to the Board of Directors at the 2025 Annual Meeting of Stockholders. The Board expressed gratitude for his service and noted that his decision was not due to any disagreements with the company’s operations, policies, or practices.

Financial Disclosures

OPAL Fuels to Announce Q1 2025 Earnings Soon

Neutral

Apr 24, 2025

On April 24, 2025, OPAL Fuels Inc. announced it will release its earnings results for the first quarter of 2025 after market close on May 8, 2025, with a conference call scheduled for May 9, 2025. This announcement is part of the company’s ongoing efforts to keep stakeholders informed about its financial performance and strategic direction, which could impact its operations and market positioning.

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.