What happened
Shares of Aemetis (AMTX 2.44%) soared 52% on Monday after the advanced fuels and biochemicals company issued a new five-year expansion plan.
So what
Aemetis believes it can produce more than $1 billion in revenue and $325 million in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) by 2025. To do so, it will need to increase its revenue and EBITDA at compound annual growth rates of 35% and 109%, respectively.
Investors are excited about Aemetis' long-term growth plan. Image source: Getty Images.
Aemetis said the revenue gains will be driven by its renewable natural gas (RNG) operations, which use methane from California dairy farms, and its Carbon Zero renewable jet- and diesel-fuel plants. Aemetis said its Carbon Zero 1 plant will use its patented technology to convert waste biomass, such as orchard wood, into hydrogen that can be used to produce zero-carbon fuels.
Notably, airplanes, trucks, and ships will be able to use the jet and diesel fuels Aemetis will produce without "significant changes in fueling infrastructure or engines," according to the company.
Now what
Renewable fuels are a massive growth opportunity. CEO Eric McAfee estimates that its $1 billion revenue forecast in 2025 represents less than 1% of Aemetis' total addressable market. With demand for renewable fuels set to rise due to concerns about climate change, Aemetis could easily grow its revenue and earnings at impressive rates for at least the next decade.
