What happened

Gevo (GEVO 10.14%) stock finished May up 12%, according to data from S&P Global Intelligence, as the renewable energy company surged after providing investors with an update in its first-quarter earnings report.

As you can see from the chart below, the May 13 report was enough to turn around the stock's momentum, leading to a sharp comeback:

Recent GEVO stock prices, contrasted with the movement of the S&P 500.

GEVO data by YCharts.

So what

Gevo stock ripped 43% higher over a two-day span after the earnings report came out. Investors weren't watching the numbers as much as they were searching for clues about the progress of Net-Zero 1, a novel project under development in South Dakota that is expected to produce 45 million gallons of fuel per year, as well as animal feed and corn oil.

A Gevo renewable energy plant.

Image source: Gevo.

Management said that front-end engineering and design (FEED) was scheduled to be completed by December of this year. The company also said it had broken ground on its renewable natural gas project in Iowa, and expects it to begin operating in early 2022, with annual run-rate cash generation forecast at $9 million to $16 million.

Gevo is well capitalized after raising cash through debt and equity, and now has $525 million in cash, up from $78 million.

CEO Patrick Gruber summed up the company's current position: "[T]he FEED engineering work is going well and is on schedule. The RNG [renewable natural gas] plant is expected to be online in 2022 and begin to generate cash then. The interest in our product and the customer pipeline has increased significantly, which is extremely positive. Overall, things are going very well and we are successfully executing our business plans."

Now what

Gevo is a development-stage renewable energy company, which processes crops like corn into hydrocarbons that can be used as gasoline, jet fuel, and other fuels. The company generated just $93,000 in revenue in the first quarter. But investor attention is on Net-Zero 1, and on Gevo's underlying technology, which offers a unique approach to making conventional fuels through renewable means.

The stock rallied late last year after Joe Biden won the presidential election, as investors bet on increased investment in green energy; Gevo's founder was even named to a Biden administration task force.

High expectations are already priced into the stock, however, as it has a market cap of $1.5 billion. But continued progress on Net-Zero 1 could lift the share price further.