Thursday, November 11, 2021
Gevo (GEVO)
Quarterly Losses Mask Solid Development Plan Progress
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.
EBITDA losses continued in 3Q2021. Given the early stage of development of the renewable fuels concept, it isn’t surprising that EBITDA was negative $9.3 million and EBITDA losses expected into late next year. Cash declined to $522 million from $567 million in 2Q2021 due to the quarterly cash burn, capex for longer lead time equipment and the acquisition of patents from Butamax.
Contract portfolio unchanged, but development pipeline continues to expand and new large contracts appear on the horizon. While the contracted portfolio remains 54 MGPY, or ~$1.6 billion, the size of the potential CVX commitment approaches 150MGPY. New contracts should fill up Net Zero Two capacity and co-locating it with Net Zero One might also leverage plant infrastructure …
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.
