A week ago, Gevo, Inc. (NASDAQ:GEVO) came out with a strong set of first-quarter numbers that could potentially lead to a re-rate of the stock. The results overall were credible, with revenues of US$29m beating expectations by 10%. Statutory losses were US$0.09 per share, 10% below what the analysts had forecast. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there’s been a strong change in the company’s prospects, or if it’s business as usual. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
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Taking into account the latest results, the consensus forecast from Gevo’s dual analysts is for revenues of US$178.1m in 2025. This reflects a major 324% improvement in revenue compared to the last 12 months. The loss per share is expected to greatly reduce in the near future, narrowing 20% to US$0.28. Yet prior to the latest earnings, the analysts had been forecasting revenues of US$166.9m and losses of US$0.23 per share in 2025. So it’s pretty clear the analysts have mixed opinions on Gevo even after this update; although they upped their revenue numbers, it came at the cost of a considerable increase to per-share losses.
Check out our latest analysis for Gevo
There was no major change to the consensus price target of US$5.45, with growing revenues seemingly enough to offset the concern of growing losses.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. The analysts are definitely expecting Gevo’s growth to accelerate, with the forecast 6x annualised growth to the end of 2025 ranking favourably alongside historical growth of 28% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 3.5% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Gevo to grow faster than the wider industry.
The most important thing to note is the forecast of increased losses next year, suggesting all may not be well at Gevo. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target held steady at US$5.45, with the latest estimates not enough to have an impact on their price targets.
