DALLAS, TX -- June 16th, 2025 -- Stonegate Capital Partners updates coverage on Aemetis, Inc. (Nasdaq:AMTX). In the first quarter of 2025, Aemetis reported total revenues of $42.9M, compared to $72.6M in the same period last year, with the year-over-year decline primarily driven by shifts in timing in receiving new government biodiesel contracts in India. Net loss for the quarter was $24.5M, relatively flat versus a net loss of $24.2M in 1Q24, reflecting ongoing investment in growth initiatives and higher interest expenses. The Company ended the quarter with $0.5M in cash, down from $0.9M at year-end, though liquidity was bolstered by $19.0M in cash proceeds from the sale of transferable investment tax credits. Additional tax credit sales, including those under the Section 45Z program, are expected later in 2025.
Company Updates:
Policy Tailwinds to Drive Growth– Aemetis is ideally positioned to benefit from four major U.S. policy tailwinds accelerating demand for low-carbon fuels. These include: (1) nationwide move from E10 to year-round E15 ethanol blends, expanding ethanol demand by 50%; (2) expanding state and federal low-carbon fuel standards that incentivize investment and reward low-CI production; (3) the IRS establishment of the provisional emissions rate (government’s value on the reduced emission rate for dairy biofuel), enabling Aemetis’s dairy RNG to qualify for 45Z production tax credits starting in 2025; and (4) a 20-year mandate to increase low-carbon fuel usage. With active ethanol and dairy RNG operations, Aemetis aligns well with these regulatory drivers and long-term decarbonization goals.
Aemetis’ first quarter results provided the strongest signal to date that the Company is starting to execute on its highest growth business, Dairy RNG. Over the last few years, the Company has invested in and built out one of the nation’s largest networks of dairy renewable gas production (dairy digestors) in California’s Central Valley, a rich agriculture region close to the State’s energy distribution network. Capacity is currently at 550,000 MMBtus and expected to increase to 1,000,000 by the end of 2026. This business, while in its infancy, is now beginning to accelerate production and monetize it in multiple ways:
- Sale of the gas molecule;
- Sale of D3 RIN credits; and
- Sale of Low-Carbon Fuel Standard production tax credits.
The Company’s California Ethanol business in the first quarter continued to realize modest growth, which could be amplified by the 45Z production tax credit. Meanwhile, India Biofuel for the year remains on track for sustained growth, where sales will be recognized toward the latter half the year as reflected by the $31 million order that will be booked in the second quarter.
Valuation – We use a Discounted Cash Flow Model when valuing AMTX. Our valuation model returns a valuation range of $9.06 to $20.87 with a midpoint of $13.66.
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