Aemetis (AMTX) Soars 13.7%: Is Further Upside Left in the Stock?

Aemetis (AMTX) shares soared 13.7% in the last trading session to close at $16.97. The move was backed by solid volume with far more shares changing hands than in a normal session. This compares to the stock’s 45.2% gain over the past four weeks.

This marks the second consecutive day of Aemetis’ price increase since the announcement of an intriguing expansion plan. Per the five-year plan, the company’s renewable natural gas operations will drive its revenues to more than $1 billion by 2025, representing a compound annualized growth rate (CAGR) of 35% in the 2021-2025 period. A massive portion of the increase will likely be supported by the company’s California dairy renewable natural gas farms along with its Carbon Zero renewable jet/diesel fuel facilities. Moreover, Aemetis’ adjusted EBITDA is expected to jump to $325 million during this period, indicating a CAGR of 109%.

Price and Consensus

Price Consensus Chart for Aemetis

This renewable fuels and specialty chemicals company is expected to post quarterly loss of $0.76 per share in its upcoming report, which represents a year-over-year change of -130.3%. Revenues are expected to be $47.69 million, down 8.5% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

For Aemetis, the consensus EPS estimate for the quarter has been revised 18.5% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn’t usually translate into price appreciation. So, make sure to keep an eye on AMTX going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank 3 (Hold). You can see

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