Alto Ingredients Inc

Alto Ingredients reported its fourth consecutive quarter of positive gross profit, income from operations, net income, and adjusted EBITDA in the second quarter of 2026. Consolidated net sales rose to $246 million, up $27 million from a year earlier, with gross profit increasing by $19 million to $17 million. Adjusted EBITDA improved by $23.9 million to $23.7 million, and net income attributable to common stockholders was $11.4 million, or $0.15 per share, compared to a net loss of $11.3 million a year ago. The company sold 88.5 million gallons of ethanol and specialty alcohols at an average price of $2.15 per gallon, up 10% year over year, while crush margins improved to $0.33 per gallon from $0.11 per gallon. Alto also recognized $5.1 million in 45Z tax credit earnings during the quarter and expects to generate a minimum of $15 million in income from tax credits for the full year.

Alto Ingredients has surged 343.6% over the past year yet still trades at a forward price-to-sales ratio of 0.4, well below the industry average of 3.29 and the sector average of 2.28. The company swung to a first-quarter 2026 profit of 5 cents per share from a year-ago loss of 16 cents, with adjusted EBITDA improving to $4.7 million from negative $4.4 million. Favorable industry dynamics, including strong export demand and higher corn oil prices, helped lift board crush margins to 17 cents per gallon from 2 cents a year earlier. Alto also recognized $3.9 million in Section 45Z tax-credit earnings in the quarter and expects roughly $15 million in annual net proceeds from qualifying production. Despite the strong rally, the stock remains attractively valued compared with peers such as Green Plains, Gevo, and MGP Ingredients, though commodity price volatility and potential industry margin compression pose risks.

Alto Ingredients has been added to the Russell 2000 and Russell 3000 Indexes, effective after the close of U.S. markets on Friday, June 26, 2026. The company, a producer and distributor of renewable fuels, essential ingredients and specialty alcohols, announced the inclusion as a milestone that builds on its operational momentum. President and CEO Bryon McGregor said the move is expected to bring expanded institutional exposure. The Russell US Indexes are widely used benchmarks for index funds and active investment strategies.

Alto Ingredients and Green Plains are both evolving beyond traditional ethanol production, but Alto Ingredients currently offers a more compelling turnaround and valuation story. Its improving profitability, stronger crush margins, growing specialty alcohol and ingredients business, and exposure to Section 45Z incentives provide multiple avenues for earnings growth. While Green Plains continues to advance its low-carbon and carbon capture initiatives and benefits from greater scale, Alto Ingredients' improving operational execution, strengthening balance sheet and leverage to improve industry fundamentals could position the stock to deliver stronger upside potential over the near to medium term. Both stocks carry a Zacks Rank #1 (Strong Buy).