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PureCycle Technologies (PCT)
NASDAQ:PCT
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PureCycle Technologies
(NASDAQ:PCT)
34Underperform
Positive Factors
Commercialization
Product commercialization in 2025 could result in the next leg up in PCT.
Market Opportunity
Significant commercial opportunity in the fiber, film, and injection molding markets is beginning to take shape.
Negative Factors
Execution Risk
Execution risk is the biggest challenge for PureCycle as it looks to ramp up production in Ironton.
Financial Performance
PureCycle did not generate any revenue this quarter, which was below estimates.
PureCycle Technologies (PCT) vs. S&P 500 (SPY)
Market Cap
$1.30B
Dividend YieldN/A
Average Volume (3M)2.70M
Price to Earnings (P/E)―
Beta (1Y)2.66
Revenue GrowthN/A
EPS Growth-180.10%
CountryUS
Employees146
SectorIndustrials
Sector Strength72
IndustryIndustrial Goods
Share Statistics
EPS (TTM)-1.75
Shares Outstanding179,336,270
10 Day Avg. Volume3,311,370
30 Day Avg. Volume2,696,271
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
Price to Cash Flow (P/CF)-10.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.50Price Target Upside113.50% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
PureCycle Technologies Business Overview & Revenue Model
Company DescriptionPureCycle Technologies (PCT) is an innovative company operating in the sustainable materials sector, primarily focused on recycling and repurposing polypropylene plastic waste. The company's core product is ultra-pure recycled polypropylene, which is produced through a proprietary purification process that removes contaminants, colors, and odors found in waste plastics. This enables PureCycle to supply high-quality recycled resin that can be used in a wide range of consumer and industrial applications, contributing to a circular economy and reducing environmental impact.
How the Company Makes MoneyPureCycle Technologies generates revenue by selling ultra-pure recycled polypropylene resin to manufacturers and companies seeking sustainable materials for their products. Key revenue streams include long-term contracts with major corporations and partnerships with companies looking to incorporate recycled materials into their supply chains. Additionally, PureCycle benefits from licensing its proprietary recycling technology to other facilities, expanding its market reach and potential income sources. The company's earnings are bolstered by the growing demand for environmentally friendly materials, as businesses and consumers increasingly prioritize sustainability.
PureCycle Technologies Financial Statement Overview
Summary
PureCycle Technologies faces critical financial challenges, with no revenue generation, mounting losses, and negative cash flows. Although the debt position has improved, the company lacks profitability and operational sustainability, presenting significant risks to stakeholders.Income Statement
PureCycle Technologies has consistently reported zero revenue over the years, indicating a lack of sales and market penetration. The company has faced increasing net losses, with the latest net income at -$289 million, suggesting significant operational challenges and poor profitability. There is no revenue growth or profitability margin to assess, reflecting a struggling position in its industry.10
Very Negative
Balance Sheet
The company's debt-to-equity ratio has improved from 2.43 in 2020 to 0.37 in 2024, indicating better leverage management. However, the equity ratio has decreased over time, with the latest equity ratio at 22.61%, reflecting vulnerability in its financial structure. The decreasing total assets and stockholders' equity suggest a deteriorating asset base and financial strength.25
Negative
Cash Flow
Cash flow statements highlight negative operating and free cash flows, indicating a lack of self-sustaining operations and capital expenditure reliance without adequate financing inflows. The free cash flow has consistently been negative, with an increasing trend in cash outflows. This persistent cash burn is a significant risk factor.15
Very Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | Gross Profit |
| 0.00 | -18.86M | -26.56M | -10.55M | -8.60M | EBIT |
| 0.00 | -113.90M | -75.48M | -69.37M | -48.89M | EBITDA |
| 0.00 | -97.97M | -79.54M | -67.30M | -46.99M | Net Income Common Stockholders |
| -289.14M | -101.72M | -87.39M | -84.36M | -64.69M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 15.68M | 121.64M | 162.48M | 200.78M | 64.49M | Total Assets |
| 798.38M | 1.04B | 861.34M | 664.68M | 404.13M | Total Debt |
| 67.60M | 543.80M | 250.13M | 232.51M | 262.27M | Net Debt |
| 51.91M | 470.39M | 186.24M | 199.09M | 197.78M | Total Liabilities |
| 617.94M | 619.14M | 350.45M | 283.15M | 296.23M | Stockholders Equity |
| 180.45M | 420.24M | 510.88M | 381.54M | 107.90M |
| Cash Flow | Free Cash Flow | |||
| -200.41M | -248.81M | -352.67M | -191.90M | -47.76M | Operating Cash Flow |
| -144.83M | -94.91M | -65.48M | -54.51M | -17.95M | Investing Cash Flow |
| -7.01M | -102.10M | -218.39M | -305.57M | -29.81M | Financing Cash Flow |
| -109.17M | 272.00M | 247.53M | 293.37M | 378.19M |
PureCycle Technologies Technical Analysis
Negative
7.26
Price Trends
9.51
Negative
10.84
Negative
8.75
Negative
Market Momentum
-0.41
Positive
33.50
Neutral
10.94
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCT, the sentiment is Negative. The current price of 7.26 is below the 20-day moving average (MA) of 9.30, below the 50-day MA of 9.51, and below the 200-day MA of 8.75, indicating a bearish trend. The MACD of -0.41 indicates Positive momentum. The RSI at 33.50 is Neutral, neither overbought nor oversold. The STOCH value of 10.94 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCT.
PureCycle Technologies Risk Analysis
PureCycle Technologies disclosed 29 risk factors in its most recent earnings report. PureCycle Technologies 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
PureCycle Technologies Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $91.59B | 33.72 | 36.24% | 1.32% | 8.01% | 20.17% | |
67 Neutral | $4.43B | 17.30 | 45.91% | 2.50% | -1.75% | -21.15% | |
65 Neutral | $8.23B | 12.78 | 22.72% | 1.45% | -6.59% | -7.81% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
61 Neutral | $24.76B | 18.66 | 10.69% | 6.88% | -1.46% | -36.00% | |
58 Neutral | $26.32B | 23.92 | 6.14% | 7.49% | -3.72% | 91.57% | |
34 Underperform | $1.30B | ― | -96.27% | ― | ― | -180.10% |
* Industrials Sector Average
Performance Comparison
PCT
PureCycle Technologies
7.41
2.47
50.00%
GPK
Graphic Packaging
27.43
-0.01
-0.04%
LYB
LyondellBasell
73.96
-20.62
-21.80%
SEE
Sealed Air
30.26
-5.82
-16.13%
WM
Waste Management
224.21
17.39
8.41%
DOW
Dow Inc
36.67
-17.67
-32.52%
PureCycle Technologies Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -23.34% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Positive
The earnings call highlighted significant commercial successes and operational improvements, particularly the commercialization of the Ironton facility and strong customer feedback. However, challenges remain with cash reserves and dependency on certification for inventory sales.Highlights
Successful Commercialization of Ironton
PureCycle entered a new period of commercialization for its Ironton facility, with progress leading to the first meaningful purchase order from Drake.
Strong Customer Feedback and Demand
Positive feedback from customers indicates that products meet or exceed the qualities of virgin material, with over 20 trials ongoing and more than 10 in later-stage industrial trials.
Procter & Gamble Partnership
Amended license agreement with Procter & Gamble secures exclusivity in North America and additional exclusivity for global expansion.
Expansion in Various Market Segments
Engaged in trials across various segments, including rigid packaging, flexible packaging, and automotive, with potential demand reaching up to 500 million pounds per year.
Operational Improvements at Ironton
Achieved a new monthly high of almost 70% on-stream time in December, with significant improvements in reliability and quality metrics.
Successful Capital Raise
Raised $33 million in February, enhancing liquidity and attracting significant investment from Plead Investment Advisors.
Lowlights
Limited Cash Reserves
Year-end liquidity position included just under $16 million of unrestricted cash, with cash expenses in the fourth quarter totaling $68 million.
Dependency on Certification for Inventory Sales
Sales held back to achieve higher value, dependent on third-party certification, expected toward the end of Q1.
Uncertainty in Automotive Market Timing
Discussions ongoing about whether recycled content will be introduced in a current or next model year vehicle, affecting the timeline for commercialization.
Company Guidance
During the PureCycle Technologies fourth quarter 2024 corporate update call, the company highlighted several key metrics and developments. In terms of operational progress, the Ironton facility achieved a maximum feed rate of 12,500 pounds per hour with an on-stream time nearing 70% in December, signaling robust improvements in production reliability. The company compounded 4 million pounds of material in Q4 and has a promising pipeline of 29 trials with potential customers, with 16 trials at an industrial scale stage. This is expected to unlock a demand potential of 250 to 500 million pounds per year. Financially, PureCycle raised $33 million in February and ended the year with nearly $16 million in unrestricted cash, maintaining a monthly cash burn rate around $9 to $9.5 million. Furthermore, PureCycle anticipates securing third-party certification for 7.2 million pounds of finished product in inventory by the end of Q1. The company is also engaged in significant partnerships, including an amended license agreement with Procter & Gamble, positioning itself for robust commercialization and growth.PureCycle Technologies Corporate Events
Product-Related AnnouncementsBusiness Operations and Strategy
PureCycle Technologies Reports Progress in Operations and Facilities
Positive
Feb 27, 2025
In a corporate update for the fourth quarter and fiscal year ending December 31, 2024, PureCycle Technologies announced significant progress in its operations, including improvements at its Ironton Facility and the successful launch of the Denver, PA sorting facility. The company has made strides in commercializing its PureFive™ resin, with successful trials and sales to major companies such as Drake Extrusion Inc. and Churchill Container. These developments highlight PureCycle’s potential for growth in various industries, including consumer goods and automotive, as it continues to enhance production capacity and product quality.
Executive/Board Changes
PureCycle Technologies Appoints New CFO Amid Leadership Changes
Neutral
Jan 6, 2025
PureCycle Technologies, Inc. has made changes to its executive leadership with the appointment of a new Chief Financial Officer and has entered into a separation agreement with the previous CFO, Michael E. Dee. The terms of Mr. Dee’s separation include the continuation of vesting of service-based restricted shares. A recent amendment to this agreement extends the expiration date for a portion of these shares to December 31, 2026, contingent on certain operational conditions being met at the company’s Ironton, Ohio plant.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.