Down 75% in the Past Year, is Now a Good Time to Buy Shares of Gevo?

NASDAQ: GEVO | Gevo, Inc. News, Ratings, and Charts

GEVO – Clean energy company Gevo (GEVO) has made several positive developments. But is it wise to buy the stock now even though the company has not yet generated any revenue? Read on to learn our view.

Renewable fuels company Gevo, Inc. (GEVO) in Englewood, Colo., recently announced that it had begun bringing its wholly-owned dairy manure-based renewable natural gas project online and expects it to lead to annual distributions of $9 – $16 million. Also, in its December 2021 investor presentation, the company said that it has approximately $3 billion in financeable contracts in place and is negotiating an additional $30 billion in contracts with its “high-quality” customers.

However, its commercial supply arrangements will not begin until 2024. 

The stock has declined 49.4% in price over the past three months and 75% over the past year to close yesterday’s trading session at $3.61. In addition, it is currently trading 76.8% below its 52-week high of $15.57, which it hit on Feb.12, 2021, due to the Reddit-fueled short squeeze. Moreover, GEVO’s gross margin has been negative every year since 2012.

Here is what could influence GEVO’s performance in the upcoming months:

Poor Profitability

In terms of the trailing-12-month asset turnover ratio, GEVO is 99.3% lower than the 0.42% industry average. And the stock’s trailing-12-month ROCE, ROTC, and ROTA are negative compared to the 3.94%, 3.73%, and 1.26% respective industry averages.

Unfavorable Analyst Estimates

For the quarter ending March 31, 2022, analysts expect GEVO’s EPS to decrease 40% year-over-year. In addition, its EPS is expected to remain negative for the quarter ending March 31, 2022, and in its fiscal year 2022.

Stretched Valuation

In terms of forward P/S, GEVO’s 626.93x is significantly higher than the 1.58x industry average. And its 353.03x forward EV/S is considerably higher than the 2.54x industry average.

POWR Ratings Reflect Bleak Prospects

GEVO has an overall F rating, which equates to a Strong Sell in our POWR Ratings system. The POWR Ratings are calculated by considering 118 distinct factors, with each factor weighted to an optimal degree. 

Our proprietary rating system also evaluates each stock based on eight distinct categories. GEVO has an F grade for Quality, which is in sync with its lower-than-industry profitability ratios.

GEVO also has an F grade for Value, which is in sync with its higher-than-industry valuation ratios. In addition, the stock has an F grade for Stability, consistent with its 3.12 beta.

Furthermore, GEVO has a D grade for Sentiment. This is justified because analysts expect its EPS to decline in the near term.

GEVO is ranked #88 of 89 stocks in the Chemicals industry. Click here to access GEVO’s ratings for Growth and Momentum.

Bottom Line

GEVO is currently trading below its 50-day and 200-day moving averages of $4.26 and $6.06, respectively, indicating a downtrend. Because the stock looks overvalued at the current price level, we think it is best to avoid it now.

How Does Gevo (GEVO) Stack Up Against its Peers?

While GEVO has an overall POWR Rating of F, one might want to consider investing in the following Chemicals stocks with an A (Strong Buy) rating: Arkema S.A. (ARKAY), Covestro AG (COVTY), and Kronos Worldwide Inc (KRO).


GEVO shares were trading at $3.65 per share on Friday afternoon, up $0.04 (+1.11%). Year-to-date, GEVO has declined -14.72%, versus a -5.73% rise in the benchmark S&P 500 index during the same period.


About the Author: Nimesh Jaiswal


Nimesh Jaiswal's fervent interest in analyzing and interpreting financial data led him to a career as a financial analyst and journalist. The importance of financial statements in driving a stock’s price is the key approach that he follows while advising investors in his articles. More...


More Resources for the Stocks in this Article

TickerPOWR RatingIndustry RankRank in Industry
GEVOGet RatingGet RatingGet Rating
ARKAYGet RatingGet RatingGet Rating
COVTYGet RatingGet RatingGet Rating
KROGet RatingGet RatingGet Rating

Most Popular Stories on StockNews.com


Bullish or Bearish Stock Set Up?

The S&P 500 (SPY) record highs sounds pretty darn bullish on the surface. Yet as we dig below the surface there are some curious signals that point more Risk Off. This is especially true as we come into the next Fed meeting after a round of data that points to inflation still being too high...only further delaying the first rate cut. What does this all mean for stocks from here? Steve Reitmeister offers his latest views on the market outlook along with a preview of his top picks to stay on step ahead of the market. Read on for more...

3 High-Yield Dividend Stocks to Boost Your Portfolio

Even though inflation appears to be cooling down, it still remains above the Fed’s 2% target. Amid ongoing geopolitical tensions, investors could consider looking into high-yield dividend stocks, Verizon Communications (VZ), Altria Group (MO), and Ares Capital (ARCC). Keep reading...

3 Fintech Stocks Revolutionizing Financial Services

Fintech is causing a revolutionary shift in the financial services market and this could be the right time to scoop up fundamentally strong fintech stocks like PayPal Holdings (PYPL), NerdWallet (NRDS), and Qifu Technology (QFIN). Read more...

3 Value Stocks With Strong Fundamentals to Buy Now

Value investing is highly favored as it focuses on purchasing undervalued stocks with solid fundamentals, providing the potential for high returns with lower risk and a disciplined, long-term approach. Therefore, it could be wise to invest in fundamentally sound, value stocks Expedia Group (EXPE), Incyte (INCY), and Albertsons Companies (ACI) for substantial long-term returns. Keep reading...

Stock Alert: Breakout or Fake Out?

The S&P 500 (SPY) officially made new highs this week. Perhaps a reason to celebrate more gains on the way...or perhaps there are signs this move is hollow leading to more downside soon on the way. To help solve this riddle, 44 year investment veteran Steve Reitmeister shares his views along with a trading plan and top picks to stay on the right side of the action. That is what Steve Reitmeister will cover in his latest commentary below. Read on for more...

Read More Stories

More Gevo, Inc. (GEVO) News View All

Event/Date Symbol News Detail Start Price End Price Change POWR Rating
Loading, please wait...
View All GEVO News