On Wednesday, Roth/MKM maintained a positive outlook on LanzaTech Global, Inc. (NASDAQ:LNZA), reiterating a Buy rating and setting a price target of $6.00. LanzaTech's current trading price is approximately 4.9 times Roth/MKM's revenue estimate for 2024 and about 2.7 times the 2025 revenue forecast. The firm's price target is anchored on a 5.5 multiple of the anticipated 2025 revenues, which adds up to around $5, plus an additional $1 for LanzaTech's roughly 50% stake in LanzaJet.
The analyst from Roth/MKM provided insights into the factors that could pose challenges to reaching the $6 price target. These include potential slower-than-expected revenue growth, gross margins that may not meet forecasts, and the impact of industry competition on LanzaTech's long-term growth prospects.
LanzaTech Global, Inc. specializes in carbon recycling technology, which transforms carbon-rich waste and residues into valuable products, including sustainable fuels like those produced by LanzaJet. LanzaTech's share in LanzaJet is a significant part of the valuation, contributing $1 to the $6 price target.
The price target and rating are based on the firm's analysis of LanzaTech's financial outlook and market position. The target reflects the firm's confidence in the company's growth trajectory and its strategic investments, like the stake in LanzaJet.
Investors and market watchers will continue to monitor LanzaTech's performance closely, especially in terms of revenue growth and gross margins, to see if the company can meet or exceed the expectations set by Roth/MKM's analysis.
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