Monday, December 21, 2020
Gevo, Inc. (GEVO)
More Clarity on First Project. Debt Free Heading into 2021.
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.
Development plan modified to optimize design. Last week, CEO Pat Gruber updated investors on the current strategic plan and indicated that the first development (Tranche 1) is slated to be a new 45 MGPY renewable fuel plant on a greenfield site. The move away from converting the existing Luverne plant appears driven by discussions with potential financing partners. A new plant on a greenfield site should optimize the design/engineering specs, utilize state-of-the-art technology and capture other economies of scale. Targeted cost of the greenfield plant estimated in the $450 million range, excluding some infrastructure.
3Q2020 capital raises allow full pay off of convert debt next week. Debt free moving into 2021. Unless the stock price moves above the conversion price of $2.44/share by yearend, the convert debt will be fully paid off. Pro forma yearend 2020 cash should be in the $60 million range with no debt …
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.