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On Friday, Cantor Fitzgerald reaffirmed its Overweight rating on PureCycle Technologies (NASDAQ:PCT) with a steady price target of $14.00. According to InvestingPro data, analyst targets for PCT range from $9.00 to $15.00, with the stock currently trading at $9.22. Despite a 65% gain over the past year, the stock has retreated 10% year-to-date. The endorsement follows PureCycle’s fourth-quarter earnings call, where significant operational progress was reported. The Ironton facility achieved a notable increase in its maximum feed rate, reaching 12,500 pounds per hour in February, up from 10,000 pounds per hour in the previous quarter. The facility also maintained an onstream time of approximately 70% in December. InvestingPro analysis indicates the company faces profitability challenges, with analysts not expecting positive earnings this year.
In the fourth quarter, the Ironton plant produced 3.6 million pounds of resin, leading to the creation of 4 million pounds of compounded material. This marks a substantial growth in output compared to the third quarter. Moreover, PureCycle has expanded its compounding capacity from 2.5 million pounds to 5 million pounds. The company is currently engaged in over 20 trials, including tests with two of the largest consumer packaged goods companies, which could potentially convert to more than 250 million pounds of resin sales.
Furthermore, PureCycle has provided Procter & Gamble with its sales volume forecasts for 2025. The company anticipates selling approximately 4.4 million pounds of its PureFive compounded resin to P&G throughout the year, with sales expected to increase each quarter. This projection accounts for less than 10% of PureCycle’s total sales for the fiscal year. Additionally, P&G has secured exclusive rights for the North American region and extended exclusivity for other regions.
PureCycle also disclosed its financial standing, reporting a cash balance of $41.5 million at the end of the fourth quarter, down from $93.7 million in the third quarter. The decrease comes after the company raised $33 million on February 6 through a private placement of approximately 4.1 million shares. At the close of the fiscal year, PureCycle had $118.6 million in available revenue bonds and an additional $200 million line of credit at its disposal. InvestingPro data reveals a concerning current ratio of 0.59, indicating short-term obligations exceed liquid assets. For deeper insights into PCT’s financial health and 12 additional ProTips, explore the comprehensive Pro Research Report available on InvestingPro.
In other recent news, Purecycle Technologies reported its Q4 2024 earnings, which revealed significant developments despite missing specific earnings per share (EPS) and revenue benchmarks. The company ended the quarter with $15.9 million in unrestricted cash and raised an additional $33 million in February 2024. Purecycle’s cash expenses for Q4 totaled $68 million, with a substantial portion allocated to equipment. The company is actively pursuing expansion plans in Augusta and Europe, reflecting its commitment to growth. Analysts have highlighted concerns over high cash expenses, but the company’s strategic direction and unique technology have contributed to positive market sentiment. Purecycle’s recent commercial trials and strategic partnerships, including ongoing collaborations with Procter & Gamble, underscore its growth potential. The company is also preparing for facility expansion in Augusta and targeting European growth at the Port of Antwerp.
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