Alto Ingredients Inc. Common Stock (ALTO)

FairStock Score: 39/100 — MIXED

Key Financials

Strengths

• Conservative balance sheet with debt-to-equity of just 0.40, providing financial flexibility

Concerns

• Trades significantly above Graham Number ($3) with negative 54% margin of safety—limited downside protection
• Revenue declining at 1.9% year-over-year signals potential demand weakness or market share loss
• Altman Z-Score of -0.2 places it in the financial distress zone—elevated bankruptcy risk
• No meaningful dividend despite modest growth—total return depends entirely on multiple expansion

AI Analysis

Alto Ingredients Inc. Common Stock is a micro-cap basic materials company valued at $402 million. The business generates $918 million in annual revenue with a 2.3% net margin. From a quality standpoint, Alto shows distressed Altman Z-Score of -0.2 warrants caution and modest 6% ROE. On valuation, the stock is trading at a premium 33.2x earnings, with trades above its Graham Number with a negative 54% margin. Growth dynamics show revenue growing at -1.9% and profit growth of 152.3%. Our composite FairStock Score of 39/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. Operational leverage in the business model means incremental revenue growth could disproportionately boost bottom-line profitability.

Bear Case

At 33x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer