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Relative valuation derived from Materials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 36.2GRADE D
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
-4.5%
Sector: 3.3%
Dividend Analysis audit
No Dividend
This company does not currently pay a dividend.
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, Alto Ingredients, Inc. (ALTO) receives a "Hold" rating with a composite score of 50.1/100, ranked #311 out of 4446 stocks. Key factor scores: Quality 36/100, Value 55/100, Momentum 77/100. This is quantitative analysis only — not investment advice.
Alto Ingredients, Inc. (ALTO) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does Alto Ingredients, Inc. Do?
Alto Ingredients, Inc. produces and markets specialty alcohols and essential ingredients in the United States. The company operates in three segments: Marketing and Distribution, Pekin Production, and Other Production. It offers specialty alcohols used in mouthwash, cosmetics, pharmaceuticals, hand sanitizers, disinfectants, and cleaners for health, home, and beauty markets; grain neutral spirits used in alcoholic beverages, flavor extracts, and vinegar, as well as corn germ used in corn oils and carbon dioxide for food and beverage markets; and essential ingredients include dried yeast, corn gluten meal, corn gluten feed, distillers grains, and liquid feed for commercial animal feed and pet food applications. The company also provides fuel-grade ethanol used as transportation fuel and distillers corn oil used as a biodiesel feedstock, as well as fuel-grade ethanol produced by third parties. In addition, it offers transportation, storage, and delivery services through third-party service providers. The company sells ethanol to integrated oil companies and gasoline marketers; essential ingredient feed products to dairies and feedlots; and corn oil to poultry and biodiesel customers. It operates five alcohol production facilities, including three plants in the Midwestern states of Illinois; and two facilities located in the Western states of Oregon and Idaho. The company was formerly known as Pacific Ethanol, Inc. and changed its name to Alto Ingredients, Inc. in January 2021. Alto Ingredients, Inc. was founded in 2003 and is headquartered in Pekin, Illinois. Alto Ingredients, Inc. (ALTO) is classified as a small-cap stock in the Materials sector, specifically within the Chemicals industry. The company is led by CEO Michael D. Kandris and employs approximately 420 people, headquartered in Wilmington, California. With a market capitalization of $370M, ALTO is one of the notable companies in the Materials sector.
Alto Ingredients, Inc. (ALTO) Stock Rating — Hold (April 2026)
As of April 2026, Alto Ingredients, Inc. receives a Hold rating with a composite score of 50.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.ALTO ranks #311 out of 4,446 stocks in our coverage universe. Within the Materials sector, Alto Ingredients, Inc. ranks #15 of 284 stocks, placing it in the top 10% of its Materials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
ALTO Stock Price and 52-Week Range
Alto Ingredients, Inc. (ALTO) currently trades at $4.75. The stock lost $0.12 (2.5%) in the most recent trading session. The 52-week high for ALTO is $4.89, which means the stock is currently trading -2.9% from its annual peak. The 52-week low is $0.76, putting the stock 525.0% above its annual trough. Recent trading volume was 1.9M shares, reflecting moderate market activity.
Is ALTO Overvalued or Undervalued? — Valuation Analysis
Alto Ingredients, Inc. (ALTO) carries a value factor score of 55/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 29.97x, compared to the Materials sector average of 26.50x — a premium of 13%. The price-to-book ratio stands at 1.38x, versus the sector average of 2.83x. The price-to-sales ratio is 0.36x, compared to 0.74x for the average Materials stock. On an enterprise value basis, ALTO trades at 17.52x EV/EBITDA, versus 6.01x for the sector.
Overall, ALTO's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
Alto Ingredients, Inc. Profitability — ROE, Margins, and Quality Score
Alto Ingredients, Inc. (ALTO) earns a quality factor score of 36/100, signaling below-average profitability metrics relative to the broader market. The return on equity (ROE) is -4.5%, compared to the Materials sector average of 3.3%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at -2.8% versus the sector average of 0.6%.
On a margin basis, Alto Ingredients, Inc. reports gross margins of 2.6%, compared to 29.8% for the sector. The operating margin is -0.2% (sector: 6.0%). Net profit margin stands at -1.3%, versus 3.0% for the average Materials stock. Revenue growth is running at 1.9% on a trailing basis, compared to 1.8% for the sector. Profitability is below benchmark levels, which may reflect industry headwinds, elevated reinvestment, or structural challenges.
ALTO Debt, Balance Sheet, and Financial Health
Alto Ingredients, Inc. has a debt-to-equity ratio of 34.0%, compared to the Materials sector average of 41.0%. The low leverage indicates a conservative balance sheet with significant financial flexibility. The current ratio is 2.64x, indicating strong short-term liquidity. Total debt on the balance sheet is $85M. Cash and equivalents stand at $33M.
ALTO has a beta of 0.64, meaning it is less volatile than the S&P 500, making it a relatively defensive holding. The stability factor score for Alto Ingredients, Inc. is 38/100, suggesting elevated price swings that may be unsuitable for conservative portfolios.
Alto Ingredients, Inc. Revenue and Earnings History — Quarterly Trend
In TTM 2026, Alto Ingredients, Inc. reported revenue of $938M and earnings per share (EPS) of $0.16. Net income for the quarter was $-11M. Gross margin was 2.6%. Operating income came in at $-845,000.
In FY 2025, Alto Ingredients, Inc. reported revenue of $918M and earnings per share (EPS) of $0.16. Net income for the quarter was $13M. Gross margin was 3.8%. Revenue grew -4.9% year-over-year compared to FY 2024. Operating income came in at $7M.
In Q3 2025, Alto Ingredients, Inc. reported revenue of $241M and earnings per share (EPS) of $0.19. Net income for the quarter was $14M. Gross margin was 9.8%. Revenue grew -4.3% year-over-year compared to Q3 2024. Operating income came in at $17M.
In Q2 2025, Alto Ingredients, Inc. reported revenue of $218M and earnings per share (EPS) of $-0.15. Net income for the quarter was $-11M. Gross margin was -0.9%. Revenue grew -7.6% year-over-year compared to Q2 2024. Operating income came in at $-8M.
Over the past 8 quarters, Alto Ingredients, Inc. has demonstrated a growth trajectory, with revenue expanding from $236M to $938M. Investors analyzing ALTO stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
ALTO Dividend Yield and Income Analysis
Alto Ingredients, Inc. (ALTO) does not currently pay a dividend. This is common among smaller companies in the Chemicals industry that prefer to reinvest cash flows into business expansion rather than returning capital to shareholders. Income-focused investors looking for Materials dividend stocks may want to explore other Materials stocks or use the stock screener to filter by dividend yield.
ALTO Momentum and Technical Analysis Profile
Alto Ingredients, Inc. (ALTO) has a momentum factor score of 77/100, indicating strong price momentum with the stock outperforming the majority of the market over recent periods. Stocks with high momentum scores have historically tended to continue their outperformance in the near term. The investment factor score is 33/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 47/100 reflects moderate short selling activity.
ALTO vs Competitors — Materials Sector Ranking and Peer Comparison
Comparing ALTO against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full ALTO vs S&P 500 (SPY) comparison to assess how Alto Ingredients, Inc. stacks up against the broader market across all factor dimensions.
ALTO Next Earnings Date
No upcoming earnings date has been announced for Alto Ingredients, Inc. (ALTO) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy ALTO? — Investment Thesis Summary
Alto Ingredients, Inc. presents a balanced picture with arguments on both sides. The quality score of 36/100 flags below-average profitability. Price momentum is positive at 77/100, suggesting the trend favors buyers. High volatility (stability score 38/100) increases portfolio risk.
In summary, Alto Ingredients, Inc. (ALTO) earns a Hold rating with a composite score of 50.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on ALTO stock.
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Institutional Research Dossier
Alto Ingredients, Inc. (ALTO) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
We maintain a Hold rating on Alto Ingredients (ALTO), driven by a mixed assessment of its financial performance and strategic positioning. While the company has shown recent improvements in profitability, particularly in Q3 FY2025, its historical volatility and thin margins raise concerns about long-term sustainability. The company's valuation appears attractive on an EV/EBITDA basis, but its negative ROE and inconsistent profitability temper our enthusiasm.
Alto Ingredients operates in a cyclical industry with exposure to commodity price fluctuations and regulatory changes. While the company's shift towards specialty alcohols and essential ingredients offers potential for higher margins, execution risk remains a key consideration. The Hold rating reflects a balanced view of the company's potential upside and inherent risks, suggesting investors should await further evidence of consistent profitability and successful execution of its strategic initiatives before taking a more decisive position.
Business Strategy & Overview
Alto Ingredients operates in the renewable fuel and specialty alcohol industry, focusing on the production and marketing of various alcohol products and essential ingredients. The company's business is segmented into Marketing and Distribution, Pekin Production, and Other Production. The Marketing and Distribution segment handles the sale and distribution of ethanol and related products. The Pekin Production segment focuses on the operations of the company's largest production facility in Pekin, Illinois. The Other Production segment encompasses the remaining production facilities located in the Midwest and Western United States.
The company's strategic focus has shifted towards higher-value specialty alcohols and essential ingredients, aiming to reduce reliance on the volatile fuel-grade ethanol market. Specialty alcohols are used in a variety of applications, including cosmetics, pharmaceuticals, and sanitizers, offering potentially higher margins compared to fuel ethanol. Essential ingredients, such as dried yeast and corn gluten feed, cater to the animal feed and pet food markets, providing diversification and revenue stability.
Alto Ingredients' geographic footprint includes five alcohol production facilities strategically located in the Midwest and Western states. This geographic diversity allows the company to access different feedstock sources and serve various regional markets. The company also utilizes third-party transportation and storage services to efficiently distribute its products to customers across the United States.
The company's competitive landscape includes other ethanol producers, specialty alcohol manufacturers, and suppliers of animal feed ingredients. Alto Ingredients differentiates itself through its focus on specialty products, its geographic diversification, and its relationships with key customers in the fuel, food, and beverage industries. However, the company faces challenges from fluctuating commodity prices, regulatory changes, and competition from larger, more established players in the industry.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
1.9%
Sector: 1.8%
IN LINE
Economic Moat Analysis
Alto Ingredients' economic moat is assessed as None. The company operates in a highly competitive industry with limited barriers to entry. The production of ethanol and related products is largely commoditized, with minimal product differentiation. While the company's shift towards specialty alcohols offers some potential for differentiation, it is not clear that these products command significant pricing power or create substantial switching costs for customers.
The company does not possess significant network effects. Its customer base is diverse, and there is no evidence of increasing returns to scale as the company grows. Switching costs for customers are also low, as they can easily switch between different suppliers of ethanol and related products.
Alto Ingredients' intangible assets, such as patents or proprietary technology, are not significant. The company's production processes are relatively standard, and it does not have any unique intellectual property that provides a competitive advantage.
While the company may have some cost advantages due to its geographic location and access to feedstock, these advantages are not substantial enough to create a significant moat. Other ethanol producers and suppliers of animal feed ingredients have similar access to resources and can compete effectively on price.
Efficient scale is not a significant factor in the ethanol industry. While there are some economies of scale in production, these are not large enough to create a barrier to entry for new competitors. The industry is characterized by a large number of producers, and no single company has a dominant market share.
Financial Health & Profitability
Alto Ingredients' financial health presents a mixed picture. The company's revenue has fluctuated in recent years, with a decrease from $1.22 billion in FY2023 to $917.93 million in FY2025. This decline reflects the volatility of the ethanol market and the impact of commodity price fluctuations. Gross margins have been consistently thin, averaging around 1-3% in recent years. However, Q3 FY2025 showed a significant improvement in gross margin to 9.7%, suggesting a potential turnaround in profitability.
Net income has been volatile, with significant losses in FY2023 and FY2024. However, the company reported a net income of $13.34 million in FY2025, driven by improved margins and cost management. The company's ROE is negative (-4.5%), indicating poor returns on equity. This is significantly below the sector average of 2.7%.
The company's balance sheet is moderately leveraged, with a total debt of $84.59 million and a debt-to-equity ratio of 34.00. This is slightly below the sector average of 40.00. The company's current ratio is healthy at 2.64, indicating sufficient liquidity to meet its short-term obligations. Total cash stands at $32.52 million.
Free cash flow has been inconsistent. While FY2025 shows a positive FCF of $35.89M, FY2024 had a negative FCF of $-1.75M. This inconsistency highlights the company's vulnerability to commodity price fluctuations and operational challenges.
The quarterly financial history reveals a pattern of volatility in revenue and profitability. While Q3 FY2025 showed a strong performance, previous quarters in FY2025 and FY2024 were characterized by losses and thin margins. This inconsistency raises concerns about the sustainability of the company's recent improvements.
Valuation Assessment
Alto Ingredients' valuation is mixed. The company's P/E ratio of 26.0x is in line with the sector average of 26.1x. However, this metric is less meaningful given the company's historical earnings volatility and recent return to profitability. A more relevant metric is EV/EBITDA, where the company trades at 3.1x, significantly below the sector average of 5.2x. This suggests that the company may be undervalued on an enterprise value basis.
However, the company's negative ROE and inconsistent profitability temper our enthusiasm. While the EV/EBITDA multiple suggests undervaluation, the company's poor returns on equity and volatile earnings history raise concerns about its long-term value creation potential.
The company's free cash flow yield is difficult to assess due to the inconsistency of its FCF generation. While FY2025 shows a positive FCF, previous years have been characterized by negative or minimal FCF. This makes it difficult to determine the company's intrinsic value based on its cash flow generation.
Relative to its historical valuation, Alto Ingredients' current multiples are within a reasonable range. However, the company's historical performance has been characterized by volatility and inconsistency, making it difficult to draw meaningful conclusions from historical comparisons.
Overall, the company's valuation appears fair, reflecting the mixed outlook for its future performance. While the EV/EBITDA multiple suggests undervaluation, the company's negative ROE, inconsistent profitability, and volatile cash flow generation warrant caution. Investors should await further evidence of consistent profitability and successful execution of its strategic initiatives before taking a more decisive position.
Risk & Uncertainty
Alto Ingredients faces several specific risks that could impact its financial performance and strategic objectives. One of the most significant risks is commodity price volatility. The company's profitability is highly sensitive to fluctuations in the prices of ethanol, corn, and other commodities. A sharp decline in ethanol prices or a spike in corn prices could significantly reduce the company's margins and profitability.
Regulatory risk is another key consideration. The ethanol industry is subject to various federal and state regulations, including mandates for renewable fuel usage and environmental regulations. Changes in these regulations could significantly impact the demand for ethanol and the company's operating costs. For example, changes to the Renewable Fuel Standard (RFS) could affect the volume of ethanol that is required to be blended into gasoline.
Competition is also a significant risk. The ethanol industry is highly competitive, with numerous producers vying for market share. Alto Ingredients faces competition from larger, more established players with greater financial resources and economies of scale. The company also faces competition from alternative fuels and technologies, such as electric vehicles and advanced biofuels.
The company's reliance on third-party transportation and storage services also poses a risk. Disruptions in these services could impact the company's ability to efficiently distribute its products to customers. For example, a shortage of railcars or trucks could delay shipments and increase transportation costs.
Finally, the company's debt levels could pose a risk if its financial performance deteriorates. While the company's debt-to-equity ratio is currently manageable, a significant decline in profitability could make it difficult to service its debt obligations. This could lead to financial distress and potentially even bankruptcy.
Bulls Say / Bears Say
The Bull Case
BULL VIEWAlto Ingredients' shift towards higher-margin specialty alcohols and essential ingredients will drive improved profitability and reduce reliance on volatile fuel ethanol markets.
BULL VIEWThe company's low EV/EBITDA multiple suggests undervaluation, providing an attractive entry point for investors seeking exposure to the renewable fuel and specialty alcohol industry.
The Bear Case
BEAR VIEWAlto Ingredients' inconsistent profitability and negative ROE raise concerns about its long-term value creation potential, making it a risky investment despite its seemingly low valuation.
BEAR VIEWThe company's exposure to commodity price volatility and regulatory changes creates significant uncertainty and could negatively impact its financial performance.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score ALTO and 4,400+ other equities.
Alto Ingredients, Inc. exhibits a 25% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
-2.8%
Sector: 0.6%
Gross Margin
Pricing power and cost efficiency
2.6%
Sector: 29.8%
Operating Margin
Core business profitability
-0.2%
Sector: 6.0%
Net Margin
Bottom-line profitability
-1.3%
Sector: 3.0%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
