Gevo Inc (NASDAQ: GEVO) is headed for the top in the premarket hours this morning, making up for some of the profit taking that we’ve seen on the stock lately. Now the big question is, will the gains continue?
In my view, GEVO is a huge opportunity. Here’s why:
Skip to What You Want to Read
- Gevo Will Participate in a Fireside Chat
- What Does Gevo Do?
- Strong Gains Are Likely Ahead
- What Analysts Think About GEVO Stock
- Risks to Consider Before Buying GEVO Stock
- Final Thoughts
Gevo Will Participate in a Fireside Chat
In a press release issued late yesterday, Gevo announced that its CEO, Dr. Patrick Gruber, and its CCO, Timothy Cesarek, will be participating in the Water Tower Research Fireside Chat Series.
Their presentation in the series will take place on Tuesday, February 23, at 2:30 Eastern Time.
In the release, GEVO said that the topic of discussion will be its business pipeline, including contracts and going beyond the Net-Zero 1 facility.
What Does Gevo Do?
For those of you who haven’t been following the company, GEVO is focused on the development and commercialization of clean fuels. Over the past several years, the company has been researching and developing a way to turn waste feedstocks like waste wood, waste food, and any other waste that has carbon, into clean, renewable fuels.
Well, the research and development phase is done, and the company has gone commercial. In fact, just a couple of years ago, GEVO’s jet fuel was used in its first commercial flight. Since then, the company has signed multiple supply contracts and is now working on increasing production to meet what’s expected to be incredibly high demand.
In fact, the Net-Zero 1 facility is aimed at just that. This is a new production facility that will have a net zero carbon footprint. The company is currently in the process of building the production facility and has plenty of money to do it thanks to a recent fund raise.
Strong Gains Are Likely Ahead
Moving forward, there are likely bright skies in the future for Gevo. As a clean energy play, there couldn’t be a better time for the company to be in business.
Don’t forget, Joe Biden is now the President of the United States and democrats have full control over Congress and the Senate. The democrat party, led by President Biden, has long been advocates of a shift toward clean energy. Now with control in Washington DC, the party is likely to push for big changes in US consumption of energy.
As a result, I’m expecting to see grants provided to companies in the clean energy space, as well as tax cuts to both clean energy companies, and the consumers that use their products.
For GEVO, that’s great news.
While there are plenty of solar and wind power companies out there, there are few that are working on clean fuels for use in traditional vehicles. Ultimately, GEVO has no competition, at least none that has gotten to the stage that it has.
While you may be thinking that electric vehicles solve the carbon emissions in transportation issue, you’re missing something. Electric vehicles must be charged when they run low on power, and that takes hours. Moreover, human beings are habitual creatures, and traditional habits just feel right.
So, electric vehicles have some hurdles to get over.
That’s not the case for Gevo and its clean fuels. Ultimately, the company is developing a way for consumers to continue to enjoy traditional combustion engines without leaving the massive carbon footprint associated with today’s fuels.
That’s an overwhelmingly valuable concept, and considering the political tides, that value is likely to be unlocked relatively soon.
What Analysts Think About GEVO Stock
Analysts love Gevo. While there aren’t many covering the stock, those that do have great faith in it. At the moment, there are two analysts covering GEVO, both of which have a Buy rating on the stock.
Moreover, thanks to recent price target increases, the low target on the stock is $16 per share with the high being $18 and the median being $17. That price target represents the potential for more than 50% gains when compared to yesterday’s closing price.
While it’s never a good idea to blindly follow the opinions of analysts, it is a good idea to use their opinions to validate your own. So, if you were already excited about GEVO stock, you have yet another reason to smile!
Risks to Consider Before Buying GEVO Stock
There’s no such thing as a risk-free investment, and I’m not here to try and convince you that GEVO is one. In fact, like all other investments, I would urge you to consider the risks before diving in. Some of the most significant risks include:
- Speculation. GEVO is a speculative bet. The fact of the matter is that success in the company relies on consumer adoption of their clean fuels. Should all go as expected, and there be a big push for clean energy in the United States over the next few years, this adoption is a no-brainer. However, there’s no way to tell the future, and if consumers, both retail and commercial don’t adopt the company’s products, it will likely see declines.
- Profitability. Gevo spends all its money on research and building its infrastructure out. As a result, it operates at a loss. Should the company’s infrastructure builds not lead to profitability before money in the bank runs dry, another dilutive offering may be on the horizon, which could cause declines.
Sure, there are risks to consider, but if you show me a risk-free investment, I’ll dive in head first. The fact of the matter is that Gevo is a promising play at the moment.
The company has been working for years to perfect clean fuels, and has done just that. Moreover, the company is ramping up production capacity as demand is likely to fly ahead.
Considering the climate on the political side of the coin, and all GEVO has accomplished over the past few years, it only makes sense that the gains we saw in the beginning of this year could just be the tip of the iceberg.