Shares of Gevo, Inc. (GEVO) rose 3.8% in Thursday’s early trade, even though the company reported a loss of $0.07 per share in the third quarter of 2021, which was in line with analysts’ estimates. However, the figure compares favorably with a loss of $0.09 per share in the same quarter last year.
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The renewable chemicals and next generation biofuels company focuses on the development and commercialization of renewable alternatives to petroleum-based products. (See Gevo stock chart on TipRanks)
Quarterly revenues stood at $142,000, down 26% from the same quarter last year. The consensus estimate for the same stood at $270,000. Hydrocarbon revenue (73% of the total revenues) comprised sales of sustainable aviation fuel and renewable premium gasoline.
The CEO of Gevo, Dr. Patrick R. Gruber, said, “We’ve made great progress; the pieces are coming together. We are seeing demand for our products increase and we are establishing alliances that, we expect, will help us accelerate growth beyond our Net-Zero 1 project. We are pleased that Net-Zero 1 appears to be on track, too. Overall, a very good quarter.”
Analyst’s Recommendation
Following the release of the third-quarter results, H.C. Wainwright analyst Amit Dayal maintained a Buy rating on Gevo with a price target of $18 (152.5% upside potential).
Dayal said, “We believe the company’s core current efforts around progressing the Net-Zero 1 plant and RNG project deployment remain on track. We continue to anticipate cash flows from the RNG project to begin in early 2022, with expectations that this plant could generate cash distributions at an annual run-rate of $9-16M by the end of 2022.”
Overall, the rest of the Street is bullish on the stock and has a Strong Buy consensus rating based on 3 unanimous Buys. The average Gevo price target of $14.67 implies upside potential of about 105.8% from current levels.
Smart Score
According to TipRanks’ Smart Score system, Gevo gets a 6 out of 10, which indicates that the stock is likely to perform in line with market averages.
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