Stonegate Capital Partners has updated its coverage of Aemetis, Inc. (Nasdaq: AMTX) following the company's third-quarter 2025 results, highlighting substantial growth in renewable natural gas production and multiple policy tailwinds driving future expansion. The company's performance underscores the accelerating transition toward low-carbon energy solutions and the financial viability of renewable fuel technologies.
Aemetis reported $59.2 million in revenue for the third quarter, representing a $7 million sequential increase driven by India OMC orders and improved California ethanol pricing and volumes. The company's dairy RNG platform showed particularly strong momentum, with twelve operating digesters producing 114,000 MMBtu during the quarter and generating approximately $4.0 million in revenue. This production benefited from the full monetization of seven newly approved LCFS pathways through biogas sales.
The company's expansion plans indicate significant scaling ahead, with capacity currently expected to reach 550,000 MMBtus by year-end and projected to increase to 1.0 million MMBtus by fiscal year 2027. Aemetis has signed equipment and installation contracts totaling $57 million year-to-date across its dairy RNG and Mechanical Vapor Recompression (MVR) projects, demonstrating substantial capital commitment to renewable energy infrastructure.
Monetization strategies have diversified substantially, now including sales of RNG molecules, D3 RINs, and Section 45Z production tax credits. The company is planning an initial sale of approximately $20 million of Section 45Z and Section 48 credits following the September completion of the multi-dairy biogas digester. Management expects 45Z monetization to become a recurring quarterly revenue item beginning in the fourth quarter of 2025, with initial sales monetizing year-to-date generated credits. Additional commercial execution includes agreements for H₂S removal and compression, pipeline, and related equipment as part of 2025 contracting activity.
In the California Ethanol segment, Aemetis executed an Engineering, Procurement and Construction agreement with NPL to install a $30 million Mechanical Vapor Recompression system at the Keyes plant. Scheduled for completion in the second quarter of 2026, the project is projected to generate $32 million of incremental annual cash flow through approximately 80% lower natural-gas usage, higher LCFS revenues from a double-digit carbon intensity reduction, and increased transferable 45Z credits.
Policy developments have created substantial tailwinds for the company's operations. California Governor Newsom signed AB30, immediately allowing statewide E15 and expanding the potential ethanol market by more than 600 million gallons annually. This regulatory change, combined with CARB's long-duration LCFS framework with improving LCFS pricing, Section 45Z production tax credits, and ongoing state and federal clean-fuel mandates, positions Aemetis favorably within the evolving renewable energy landscape.
The company's India biodiesel operations delivered $14.5 million in revenue on resumed OMC allocations, with the subsidiary continuing to target an initial public offering in 2026. Despite revenue growth, Aemetis reported an operating loss of $8.5 million, compared to $3.9 million year-over-year, with selling, general and administrative expenses increasing 15.5% sequentially. Net loss expanded to $23.7 million from $18.0 million, while cash position improved to $5.6 million at quarter-end.
Third-quarter results reflect the benefit of fully monetized LCFS pathways in the biogas segment, with additional credit monetization expected as Section 45Z and Section 48 sales commence. The combination of signed EPC agreements for MVR technology, fully monetized RNG pathways, and multiple policy supports underpins the company's focus on margin expansion, recurring credit monetization, and disciplined project financing through 2026. Stonegate Capital Partners' valuation analysis using a discounted cash flow model returns a valuation range of $9.93 to $20.48 with a midpoint of $14.06 for AMTX shares.
