Tuesday, August 11, 2020

Gevo, Inc. (GEVO)

Quarterly Loss Narrows After Cost Cuts. Capital Raise Creates Near-term Cash Cushion.

Gevo Inc is a renewable chemicals and biofuels company engaged in the development and commercialization of alternatives to petroleum-based products based on isobutanol produced from renewable feedstocks. Its operating segments are the Gevo segment and the Gevo Development/Agri-Energy segment. By its segments, it is involved in research and development activities related to the future production of isobutanol, including the development of its biocatalysts, the production and sale of biojet fuel, its Retrofit process and the next generation of chemicals and biofuels that will be based on its isobutanol technology. Gevo Development/Agri-Energy is the key revenue generating segment which involves the operation of the Luverne Facility and production of ethanol, isobutanol and related products.

Poe Fratt, Senior Research Analyst, Noble Capital Markets, Inc.

Refer to the full report for the price target, fundamental analysis, and rating.

Adjusted 2Q2020 EBITDA of $(3.1) million narrowed versus $(6.2) million in 1Q2020 due to idling Luverne plant and cost cutting. Lower cost structure pushed cash burn down to ~$4.7 million and cash burn should move below $4 million in 3Q2020. 2020 EBITDA loss estimate is $15.2 million, up from $14.4 million.

Two significant commercial agreements likely in near future. Discussions on added supply/licensing agreements are advanced even amidst current turmoil in the airline/refining industries. Agreements would expand supply portfolio of 17 million gallons/year already in place. Expansion plans now include building up supply portfolio to include isooctane (renewable gasoline) agreements. Interest in renewable fuel concept is ...

This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).

*Analyst certification and important disclosures included in the full report.  NOTE: investment decisions should not be based upon the content of this research summary.  Proper due diligence is required before making any investment decision.