One-glance verdict
Within fair range
$18.01 our estimate vs market $15.07
Wall Street consensus: $19.00 (5.5% higher than our fair-value estimate)
16% below our estimate
Fundamentals snapshot
Green Plains Inc.
GPRE · NMS · Basic Materials · Chemicals
Current price
$15.07
52-week range
$8.65 - $19.65
Market cap
$1.06B
Balance sheet
Distressed
-1.10x Concerning
Net debt $363.25M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 15.5% on equity, ahead of 40% of its peers.
- Reward Free cash flow was positive in 2/10 years.
- Risk Insider ownership is only 1.8% (peer median: 7.0%).
- Risk Net debt grew 2.8% over 3 years.
What this company does
Green Plains Inc.
Green Plains is a company that primarily turns corn into ethanol, a type of alcohol that gets blended with gasoline to make a cleaner-burning fuel. It makes most of its money selling this ethanol and other valuable byproducts from the corn, like high-protein animal feed and corn oil. This matters because the company's financial health is closely tied to the price of corn, its main ingredient, and the demand for renewable fuels.
How the company got here
Founded in 2004 and originally named Green Plains Renewable Energy, Inc., the company grew quickly to become one of the largest ethanol producers in North America. [13] Around 2018, the company began a major transformation, selling off some of its assets to reduce debt and focus more on technology. [8] This shift involved a strategic move to produce not just ethanol, but also high-value, high-protein ingredients for animal feed and other sustainable products from the same kernel of corn. [8, 15] This transition, which they call "Green Plains 2.0," aims to make the company a more stable and profitable business by creating a wider range of valuable products. [1]
What it actually does
Green Plains is an agri-tech company that takes renewable crops, primarily corn, and transforms them into a variety of sustainable ingredients. [2] Think of it like a highly advanced corn processing plant. Instead of just making one thing, they use technology to extract multiple valuable products from each kernel. [8] These products include low-carbon ethanol for fuel, renewable corn oil used for animal feed and to produce cleaner diesel, and high-protein ingredients for pet food and aquaculture (fish farming). [4, 5, 6] They are also developing clean sugars that can be used in bioplastics and other renewable chemicals. [1]
Ethanol Production
This is the company's largest and original business, responsible for the majority of its revenue. [22] In this segment, Green Plains operates biorefineries that convert corn into ethanol, a type of alcohol that is blended with gasoline to create a cleaner-burning fuel for cars. [1] This part of the business also produces co-products from the ethanol-making process, such as renewable corn oil and distillers grains, which are used as an energy-rich ingredient in livestock and poultry feed. [3, 10] The customers for these products are fuel blenders, oil companies, and agricultural businesses. [6, 10]
Agribusiness and Energy Services
This segment is a smaller but important part of the company's operations. [22] It acts as the support system for the ethanol production side by handling the buying, storing, and drying of the massive amounts of corn needed for the biorefineries. [3, 7] This division also markets and sells not only Green Plains' own products but also ethanol and other related commodities for other companies. [7] Essentially, this segment helps manage the supply chain (the entire process of getting a product from its origin to the customer) and trades in the markets for the raw materials and finished goods the company deals with. [3]
What management is betting on now
Management is focused on completing the company's transformation into a leading producer of high-value, sustainable ingredients. [9] A key part of this strategy is the rollout of their "Ultra-High Protein" technology across their facilities, which creates more valuable animal feed ingredients and makes ethanol more of a co-product than the primary focus. [1, 8] They are also heavily investing in reducing their carbon footprint through carbon capture and sequestration projects, which trap the carbon dioxide produced during fermentation. [9, 18] This not only helps the environment but also allows the company to benefit from government tax credits for producing low-carbon fuels, which they see as a significant source of future earnings. [18, 21]
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$34.38M
FY2024 Q4
$-54.23M
FY2025 Q1
$-71.75M
FY2025 Q2
$47.65M
FY2025 Q3
$35.76M
FY2025 Q4
$62.01M
FY2026 Q1
$-45.95M
FY2026 Q2
$75.58M
Revenue
$446.22M
Net income
$67.15M
Diluted EPS
0.83
Operating cash flow
$86.27M
Free cash flow
$75.58M
Fetching…
Sources
Revenue
$445.80M
Net income
$32.94M
Diluted EPS
0.42
Operating cash flow
$-39.50M
Free cash flow
$-45.95M
Fetching…
Sources
Revenue
$428.85M
Net income
$11.94M
Diluted EPS
0.26
Operating cash flow
$67.34M
Free cash flow
$62.01M
Fetching…
Sources
Revenue
$508.49M
Net income
$11.93M
Diluted EPS
0.17
Operating cash flow
$39.77M
Free cash flow
$35.76M
Fetching…
Sources
Revenue
$552.83M
Net income
$-72.24M
Diluted EPS
-1.09
Operating cash flow
$58.80M
Free cash flow
$47.65M
Fetching…
Sources
Revenue
$601.51M
Net income
$-72.91M
Diluted EPS
-1.14
Operating cash flow
$-55.04M
Free cash flow
$-71.75M
Fetching…
Sources
Revenue
$584.02M
Net income
$-54.94M
Diluted EPS
-0.79
Operating cash flow
$-26.97M
Free cash flow
$-54.23M
Fetching…
Sources
Revenue
$658.74M
Net income
$48.20M
Diluted EPS
0.69
Operating cash flow
$62.72M
Free cash flow
$34.38M
Fetching…
Sources
Is it cheap or expensive?
Fair value $18.01 vs current price $15.07
Wall Street consensus is the average analyst price target: $19.00 (5.5% higher than our fair-value estimate).
Our most-likely fair value is $18.01 a share — about 19.5% away from today's price of $15.07, so the stock currently looks fairly priced.
Is it drowning in debt?
Distressed
Net debt $363.2M. Interest coverage -1.1x.
Net debt
$363.25M
Interest coverage
-1.10x
Green Plains Inc.'s profit covers its interest bill about 0.0 times over. which is weaker than most peers shown here and 2 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Distressed
Worse cushion
Baseline
Better cushion
GPRE
BASELINE
Green Plains Inc.
Total debt $548.63M Interest coverage -1.10x This is the baseline the peer rows are being compared against.
Total debt $17.82M Interest coverage 4.07x This peer still has a real interest-payment cushion, while GPRE does not.
Total debt $900.76M Interest coverage 2.72x This peer still has a real interest-payment cushion, while GPRE does not.
Total debt $82.94M Interest coverage 1.41x This peer still has a real interest-payment cushion, while GPRE does not.
Total debt $552.13M Interest coverage -0.68x Neither company has much profit cushion over interest right now.
Total debt $324.00K Interest coverage -346.34x Neither company has much profit cushion over interest right now.
What you should know
The case for and against GPRE
3 Rewards
2 Risks
Rewards
-
Returns 15.5% on equity, ahead of 40% of its peers.
-
Free cash flow was positive in 2/10 years.
-
Trades at 9.0x P/E vs peer median 12.1x (25.6% cheaper).
Risks
-
Insider ownership is only 1.8% (peer median: 7.0%).
-
Net debt grew 2.8% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
9.02x
Forward P/E
8.96x
P/B
1.21x
P/S
0.58x
EV/EBITDA
6.96x
PEG ratio
1.16x
Profitability
How much profit each dollar creates
Gross margin
16.0%
Operating margin
15.2%
Net margin
6.8%
ROE
15.5%
ROA
4.1%
Health
Liquidity and balance-sheet strength
Debt / equity
0.63x
Current ratio
1.99x
Quick ratio
1.27x
Total debt
$548.63M
Total cash
$185.38M
Growth
How the business has been compounding
Revenue TTM
$1.83B
Revenue 5Y CAGR
-7.3%
EPS TTM
1.67
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$153.88M
Free CF TTM
$73.67M
FCF margin
4.0%
Dividend
Shareholder payout
Yield
—
Payout ratio
0.0%
Last ex-div date
2019-05-23