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Investing.com - Clear Street lowered its price target on Montauk Renewables , Inc. (NASDAQ:MNTK) to $4.50 from $5.50 on Thursday while maintaining a Buy rating following the company’s second-quarter results. The stock, currently trading at $1.95, appears undervalued according to InvestingPro’s Fair Value model.
The renewable energy company, with a market capitalization of $267 million, reported 4% revenue growth, slightly below estimates due to minor shortfalls in renewable natural gas (RNG) production volumes and realized RIN prices of $2.42, which was 2% lower than forecasted. The company maintains a healthy 43% gross profit margin and generated $44 million in EBITDA over the last twelve months.
Montauk Renewables reaffirmed its 2025 guidance for RNG revenues of $150-170 million, RNG production volumes of 5.8-6.0 MMBtu, renewable electricity generation (REG) revenues of $17-18 million, and REG production volumes of 178,000-186,000 MWh. InvestingPro subscribers can access 13 additional investment tips and a comprehensive analysis of MNTK’s financial health.
Clear Street cited ongoing higher operating and maintenance expenses as the primary reason for the price target reduction, noting that Montauk incurred approximately $3.2 million in extra preventative maintenance expenses during the first half of the year.
The firm also highlighted that Montauk’s North Carolina project is currently in early stages of revenue generation and has been a drag on profitability, but should help improve overall EBITDA margins when it reaches higher scale around March next year.
In other recent news, Montauk Renewables Inc. reported its second-quarter 2025 financial results, which showed a net loss per share of $0.04. This fell short of analysts’ expectations, which had predicted a gain of $0.02 per share. Revenue for the quarter came in slightly above projections at $45.4 million. Despite the revenue beat, the company’s financial performance was marred by increased net losses and a reduction in adjusted EBITDA. These results contributed to a notable decline in the company’s stock price after hours. The earnings report highlights ongoing challenges for Montauk Renewables. Investors may find these developments significant as they assess the company’s financial health and future prospects.
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