Investment Thesis
Alto Ingredients demonstrates stable financial health with strong liquidity and moderate leverage, but faces significant profitability headwinds with razor-thin margins (1.5% net, 0.8% operating) and declining revenue (-4.9% YoY). The company's improving net income and EPS represent modest operational progress, though growth quality remains constrained by minimal margin expansion and low capital efficiency.
ALTO Strengths
- Strong liquidity position with 2.64x current ratio and 1.60x quick ratio, providing financial flexibility
- Conservative leverage with 0.34x debt-to-equity ratio and robust 8.3x interest coverage, indicating manageable debt burden
- Positive net income growth of 10.5% YoY with 119.5% EPS growth despite revenue decline, suggesting operational improvements
ALTO Risks
- Severely compressed margins across all levels (3.8% gross, 0.8% operating, 1.5% net) characteristic of low-margin commodity chemical business with limited pricing power
- Revenue contraction of 4.9% YoY indicates weakening demand or market share loss in core markets
- Poor asset efficiency with only 3.4% ROA and 5.4% ROE despite reasonable equity base, suggesting suboptimal capital allocation
Key Metrics to Watch
- Gross margin trend - critical indicator of pricing power and input cost management in commodity chemicals
- Revenue growth trajectory - must stabilize and return to growth to support valuation
- Free cash flow sustainability - FCF margin of 0.9% leaves minimal cushion for unexpected challenges or shareholder returns
ALTO Financial Metrics
ALTO Profitability Ratios
ALTO Balance Sheet & Liquidity
ALTO 5-Year Financial Trend
5-Year Trend Summary: Alto Ingredients, Inc.'s revenue has declined by 94% over the 5-year period, indicating business contraction. The most recent EPS of $-0.40 indicates the company is currently unprofitable.
ALTO Growth Metrics (YoY)
ALTO Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $241.0M | -$2.4M | $-0.04 |
| Q2 2025 | $218.4M | -$3.1M | $-0.05 |
| Q1 2025 | $226.5M | -$11.7M | $-0.16 |
| Q3 2024 | $251.8M | -$2.4M | $-0.04 |
| Q2 2024 | $236.5M | -$3.1M | $-0.05 |
| Q1 2024 | $240.6M | -$11.7M | $-0.17 |
| Q3 2023 | $318.1M | -$2.6M | $-0.05 |
| Q2 2023 | $317.3M | -$2.6M | $-0.08 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ALTO Capital Allocation
ALTO SEC Filings
Access official SEC EDGAR filings for Alto Ingredients, Inc. (CIK: 0000778164)