Should You Bet on Alto Ingredients (NASDAQ:ALTO) Stock?
Investors eyeing penny stocks can leverage TipRanks’ penny stock screener to discover the ones with a higher probability of beating the broader market. Using the tool, we zoom in on Alto Ingredients (NASDAQ:ALTO), a penny stock that sports an Outperform Smart Score rating on TipRanks. Further, analysts’ forecast shows that ALTO stock has significant upside potential, making it an attractive bet for investors with a high-risk appetite.
What Does Alto Ingredients Do?
ALTO produces and distributes specialty alcohol and essential ingredients. Its offerings have broad applications in sectors like consumer products (health, beauty, and home), food and beverages, and renewable fuel.
Why Bet on ALTO?
Alto Ingredients’ focus on diversifying into specialty alcohols and essential ingredients supports its growth story. Further, the company is upgrading its equipment and operating systems, which will likely increase its efficiency and plant reliability.
Also, its strategy to expand corn storage capacity (used as an essential commodity in various consumer products) and specialty alcohol production, focus on increasing distribution, and investments in essential ingredients capabilities bode well for growth. Further, the expansion of its blue-chip customer base, acquisitions, and a focus on enhancing productivity are positives.
ALTO expects its productivity measures to improve its EBITDA by $50M in the next three years.
Highlighting ALTO’s efforts to drive EBITDA, H.C. Wainwright analyst Amit Dayal stated, “We believe the company’s balance sheet remains healthy to execute on the various EBITDA improvement projects the company intends to undertake.” Dayal is bullish about ALTO’s prospects.
Alto Ingredients is well-positioned to deliver strong financial numbers on the back of its growth measures, which are aimed at driving sales and enhancing productivity. It commands a Moderate Buy consensus rating on TipRanks based on one Buy and one Hold. Further, ALTO’s average price target of $21.51 implies upside potential of 409.7%.
Lastly, ALTO enjoys a Smart Score of eight out of 10 on TipRanks, implying that the stock has strong potential to outperform the market.
However, we recommend that investors should be cautious before investing in penny stocks as they are highly risky and more susceptible to economic downturns. Learn more about investing in Penny stocks: Are Penny Stocks a Good Investment?
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