While the start of 2023 promised great returns for investments in renewable energy stocks, its end disappointed many. The plunge was deep enough to be called a renewables bubble, especially in Europe.
The rest of the world wasn’t spared either, with the value of iShares Global Clean Energy ETF (NASDAQ: ICLN) plunging from $19.88 in January 2023 to $14.80 in January 2024, a drop of 25.6% in the ETF that reflects the global renewable energy market performance.
However, one component of that index might shock the market by skipping the decline and soaring beyond expectations. The renewable energy stock in question is REX American Resources Corp. (NYSE: REX), a leading American company producing ethanol, a renewable, clean fuel, and its by-products.
About REX American Resources
The holding company is the majority owner of One Earth Energy and NuGen Energy ethanol production plants with a total capacity of 300 million gallons per year and the minority owner of Big River Resources, which operates four production plants with a total capacity of approximately 425 million gallons per year.
Founded in 1980 and listed on the NYSE in 1984, the company used to operate in retail but shifted to energy in 2009. It is headquartered in Dayton, Ohio.
Beyond ethanol, REX American Resources provides distillers grains for high-quality animal feed and distillers corn oil used in producing renewable diesel and biodiesel. The company strives to reduce global greenhouse gas emissions, reduce the carbon footprint, and support the local farmers in the American Corn Belt region.
REX American Resources trades on the NYSE stock exchange under the REX ticker symbol.
REX American Resources stock price today
At the time of writing, REX American Resources stock price stands at $43.27, reflecting a slight decrease of $3.66 or -8.23% year-to-date, but an outstanding increase of $10.97 or 30.71% since March 2023.
REX American Resources financial performance
In its Q3 2023 financial report, REX reported net sales and revenue of $221.1 million, compared to $220.3 million for the same period the previous year, with a 10.4% increase in ethanol sold, offset slightly by lower commodity prices.
The gross profit for the period increased to $39.3 million from $9.3 million for the same period in 2022, which is a whopping 323.7% increase. Consequently, gross income was $41.3 million, compared with $6.1 million in the comparable year-ago period.
The company’s CEO, Zafar Rizvi, stated in the report that the company achieved the highest quarterly net income and EPS results in the company’s 39-year history, with the substantial income increase stemming from an increase in efficiency and capitalization on favorable market conditions.
Ahead of the upcoming fiscal period, analysts expected REX to achieve an EPS of $0.79. However, the current performance shows that this figure could almost double, highlighting the value investors in this renewable energy stock could get in returns.
Looking forward: What is the price prediction for REX stock?
REX American Resources has produced sustainable and resilient growth in the face of the stark overall decline of the renewable energy market.
Maintaining robust financials while simultaneously expanding its ethanol production capacities indicates that REX could grow even further and surprise the growing number of naysayers who discourage ESG investments on the grounds of recent stock price dips.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
