Gevo Inc (NASDAQ: GEVO) is screaming for the top in the market this morning, but with no news from the company, many are wondering why. Well, the company didn’t have to release any news.
A change in the political climate in the United States is setting the stage for GEVO to become a cornerstone in the clean energy revolution. Here’s what’s going on:
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- A Democrat Sweep Is Great for GEVO
- What’s Likely Ahead for the Stock
- What Analysts Think About GEVO Stock
- Risks to Consider Before Buying GEVO Stock
- Final Thoughts
A Democrat Sweep Is Great for GEVO
Yesterday was a big day for Gevo. In the Georgia runoffs, democrats took the Senate. Following the Presidential Election win by Joe Biden, and the fact that democrats have Congress, the party now controls the entire government.
So, what does that have to do with GEVO stock? EVERYTHING!
For years now, incoming president Joe Biden has been clear about his views toward the environment and how greenhouse gasses are leading to irreparable damage. As such, Biden has been clear about his plans to improve the condition of the environment by pushing consumers, businesses, and government agencies to go green.
That’s where Gevo comes in.
One of the largest sources of greenhouse gasses in the United States and other developed nations is the burning of fossil fuels for transportation. Gevo has developed technology that allows it to create clean-burning fuels from renewable feedstock.
Sure, electric vehicles also provide a solution, but that technology has a long way to go. Gevo’s technology is already at par with what it needs to be. Ultimately, its fuels can be put into vehicles that we use today for long-haul driving or short commutes.
So, with democrats controlling the White House, Senate, and Congress, there’s plenty to be excited about when it comes to GEVO stock.
What’s Likely Ahead for the Stock
I’m expecting to see compelling growth out of Gevo ahead, growth that will likely be spurred by regulatory changes.
Moving forward, the Biden Administrations and his cohorts in Congress and Senate will likely change tax policy to provide benefits to those that manufacture clean energy products. We’re also likely to see grants.
That means that there will be more money on the table for GEVO.
Beyond that, I’m expecting that the incoming government will move forward with tax benefits for those that use clean energy products, further increasing demand and providing more support for Gevo and its investors.
What Analysts Think About GEVO Stock
While it’s never a good idea to blindly follow the opinions of analysts, it is a good idea to use expert opinions as a way to validate your own. With that said, analysts have overwhelmingly positive opinions of GEVO stock.
According to TipRanks, there are currently two Wall Street analysts covering the stock. Both of the analysts rate the stock a buy. Moreover, both analysts have set a price target on GEVO of $5 per share.
Keep in mind, these price targets took place prior to the democrats taking control over Washington D.C. With the political climate changing, there’s a strong chance that these price targets will be revised upward.
Risks to Consider Before Buying GEVO Stock
If you’re going to invest, you’re going to accept risks. The fact of the matter is that there is no such thing as a risk-free investment. GEVO surely isn’t either. Before diving in, here are the risks that you should consider:
- Gevo Doesn’t Make Money. Sure, Gevo does drive revenue through the sale of its renewable fuels. However, that revenue hasn’t been nearly enough to cover the cost of running the business. If the money in the bank isn’t enough to get the company to profitability, it may look to capital markets as a way to raise funds, leading to dilution for existing shareholders.
- Penny Stock Risks. GEVO is a penny stock. As such, the stock is known for high levels of volatility. Moreover, the company’s business model isn’t fully proven, as can be seen by its lack of profitability.
- A Speculative Bet. Ultimately, a bet on Gevo is a bet that there will be a major push for clean energy in the near future. While the probability of this taking place is very high, nobody can see the future, making GEVO stock a speculative bet.
I want to be very clear about one thing. I did not outline risks to scare you off. For several years, I have been a proponent of Gevo and the work the company is doing to bring a bit of cleanliness and renewable awareness to the transportation industry.
Now, with the democrats taking over D.C., there’s a strong probability that GEVO will shine in the years ahead. I believe that we’ll see increased demand, government support, and tremendous growth out of GEVO stock in the years to come.