Analysts have been closing watching Gevo, Inc. (NASDAQ:GEVO)’s after its $10.00 Call for October 15, 2021. Gevo is a low-carbon fuel company working to reduce emissions via sustainable and renewable alternatives to standard production. This Call resulted in a high implied volatility in the options market, which can be appealing to options traders since premiums will consequently be higher.
Implied volatility indicates the potential for movement in the stock market; with a high implied volatility, this could mean a rather drastic change in either direction, making investors nervous for the immediate future of the company. Though this could mean traders are looking to sell, this status does concern investors and analysts looking at Gevo’s trajectory.
Now sitting at a market cap of 1.39B, Gevo placed in the bottom 21% of industries in Zacks Rank #4 (Sell) in the Alternative Energy - Other. This ranking alone indicates the alternative energy industry (and consequently Gevo) will underperform in the next 3 to 6 months.
Despite concerns awaiting news of Gevo’s next move, Noble Capital Markets analysts actually remain hopeful for the industry, especially following the company’s recent entry into an LOI with Chevron USA Inc., a subsidiary of one of the biggest oil and gas giants in the country.
Noble analysts note that “not only does the addition of a major integrated oil company as a partner and investor validate the renewable fuels concept, visibility improves on the funding and off-take fronts” (Proactive Investors).
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