The renewable fuels producer Aemetis (AMTX) has been on a tear thanks to its strategic $1 billion deal with Delta Air Lines. However, the stock is not necessarily a buy given the biofuel blending mandates, unsustainable valuations and weak fundamentals which could cause AMTX’s shares to retreat.Headquartered in Cupertino, California, Aemetis Inc. (AMTX) is a renewable natural gas, fuel, and biochemicals company focused on acquiring, developing, and commercializing breakthrough technologies that substitute petroleum-based products and reduce greenhouse gas emissions. The stock has gained 432.4% over the past year and 67.7% over the past month, driven by the company’s continued efforts to replace carbon-intensive transportation fuels with renewable energy and its recent deal with U.S. carrier Delta Air Lines Inc. (NYSE:DAL) to provide sustainable aviation fuel (SAF) worth over $1 billion. AMTX also introduced the Carbon-Zero manufacturing method, which aims to decarbonize the transportation industry using today’s infrastructure.
However, its shares have been down 24.7% over the past six months. Closing Friday’s trading session at $19.7, AMTX’s stock is trading 28.2% below its 52-week high of $27.44, which it hit on April 08, 2021. Moreover, the Biden administration is considering slashing the country's biofuel blending standards, a move prompted by a drop in gasoline consumption during the pandemic. This, along with its premium valuations and weak financials, could cause its shares to witness a pullback in the near term.
Here’s what could influence AMTX’s performance in the near term: