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Why Aemetis Stock Is Plunging Today

By Matthew DiLallo - May 12, 2021 at 3:43PM

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The renewable-fuel company disappointed investors.

What happened

Shares of Aemetis (AMTX 1.78%) tumbled more than 21% by 2:30 p.m. EDT on Wednesday. Weighing on the renewable-fuels company was its disappointing first-quarter results. 

So what

Aemetis generated $42.8 million of revenue during the first quarter, solely from ethanol sales. While that was up 8.4% year over year, it missed the consensus estimate by $6.3 million. Meanwhile, the company reported a loss of $0.69 per share, which missed analyst expectations by $0.16 per share.

While the company is benefiting from steadily rising ethanol sales volumes and pricing, margins were lower than the prior-year period. On top of that, its sales, general, and administrative expenses increased.

Biofuels in test tubes with an ear of corn in the background.

Image source: Getty Images.

On a more positive note, the company made progress on several strategic initiatives during that quarter. It continues to work toward delivering on its five-year plan of producing carbon-negative products. It recently formed Aemetis Carbon Capture to inject carbon-dioxide emissions into sequestration wells at its two biofuel plants in California. It also won approval for a 32-mile extension of an existing four-mile biogas pipeline as part of its dairy renewable natural gas project in California. 

Now what

Aemetis is still in the early innings of its five-year plan, which remains on track. The company estimates it can grow revenue at a 35% compound annual rate as it grows its various renewable-fuel businesses over the coming years. That growth potential makes it an interesting stock for those seeking to play the energy transition to lower carbon-alternative fuels.

Matthew DiLallo has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Aemetis, Inc. Stock Quote
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