Gevo (GEVO) Stock Dips: This Is An Opportunity

Gevo Inc GEVO Stock News

Gevo Inc (NASDAQ: GEVO) is having a rough start to the trading session this morning, declining more than 5% early on in the session. For some, this is a scary move. However, I see the move as a big opportunity. Here’s why:

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First and foremost, Gevo stock is already highly undervalued based on results provided by a recent valuation firm. The company contracted with Peak Value to get a third party view of the value of its intellectual property.

Peak Value came back and said that the company’s IP is worth a whopping $400 million.

At the moment, GEVO stock is trading with a market cap of under $100 million. So, based on Peak Value’s professional opinion, the stock is already so undervalued that it could easily trade at four times its current price. That’s huge.

Analyst seem to agree. According to TipRanks, analysts not only say to buy the stock, but have set an average price target that suggests there’s potential for a 194+% upside.

A Recent Signed Contract Further Validates The Undervaluation

Recently, GEVO announced that it signed a contract with Trafigura. The contract covers a long-term time frame and suggests that Trafigura will purchase more than $1.5 billion worth of the company’s product.

Again, we’re talking about a company with a sub-$100 million market cap.

That means that this contract has the potential to lead to long term revenues that represents more than 15 times the overall value of the entire company as the market prices it today. If that doesn’t scream undervalued… I don’t know what does!

A Change In Tides Will Lead To Tremendous Demand

Why is Trafigura buying more than $1.5 billion worth of Gevo’s clean fuel? Because the massive company sees a change in tides coming and wants to be on the leading edge of it.

Climate issues associated with the burning of carbon fuels have been in the limelight for some time. Tesla is trading at an amazig valuation due to the prospect of electric vehicles. But, electric vehicles have their limitations.

So, what’s the best option.

Well, using the vehicles that we’re used to, but doing so in a clean way. That’s what GEVO provides. They provide clean, renewable fuels that have the potential to greatly reduce the human carbon footprint on the planet.

The Bottom Line

The bottom line here is that GEVO provides a product that has the potential to become the standard in the future of fuels. At the same time, the stock is overwhelmingly undervalued. At the same time, the investment thesis surrounding the stock has seen several points of validation from analysts and valuation experts. If GEVO isn’t on you watch list, considering these facts, it should be!

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