📊 ALTO Key Takeaways
Is Alto Ingredients, Inc. (ALTO) a Good Investment?
Alto Ingredients operates in a capital-intensive, commodity-driven ethanol industry with critically thin margins (4.1% gross, 1.1% operating) and declining revenue (-4.9% YoY), resulting in minimal shareholder returns (1.7% ROE). While strong liquidity provides financial flexibility, the business generates insufficient returns on assets ($386M in total assets producing only $4.3M net income) with concerning interest coverage (2.8x) that limits debt capacity in an inherently cyclical sector.
Alto Ingredients shows adequate financial health, with solid liquidity, moderate leverage, and positive free cash flow supporting balance-sheet stability. However, the business remains fundamentally constrained by declining revenue and extremely thin gross, operating, and free-cash-flow margins, which makes earnings quality vulnerable to commodity swings and operating volatility. The company appears financially stable but not fundamentally strong enough to warrant a more bullish rating.
Alto Ingredients, Inc. Key Strengths (ALTO)
- Strong liquidity position with 3.81x current ratio and 2.54x quick ratio providing financial flexibility
- Positive operating and free cash flow generation ($4.2M and $3.3M respectively) demonstrating operational viability
- Conservative debt structure with 0.31x debt-to-equity ratio and reasonable equity base of $249.9M
- Strong liquidity profile with a 2.64x current ratio and 1.60x quick ratio
- Moderate leverage and manageable debt burden, with debt/equity of 0.34x and interest coverage of 8.3x
- Positive net income, operating cash flow, and free cash flow indicate the business is currently self-funding
ALTO Stock Risks: Alto Ingredients, Inc. Investment Risks
- Declining revenue trajectory (-4.9% YoY) with razor-thin profit margins (1.9% net, 1.1% operating, 4.1% gross) vulnerable to commodity price volatility
- Extremely low returns on capital (1.7% ROE, 1.1% ROA) indicating poor capital efficiency and minimal shareholder value creation
- Inadequate interest coverage ratio of 2.8x coupled with $77.6M long-term debt limits financial flexibility and refinancing optionality in downturns
- Exposure to ethanol market cyclicality with limited pricing power and commodity-dependent margins
- Revenue declined 4.9% year over year, suggesting weak top-line momentum
- Profitability is very thin, with only 3.8% gross margin and 0.8% operating margin
- Free cash flow margin of 0.9% indicates limited cushion if margins or volumes deteriorate
Key Metrics to Watch
- Gross margin trend and commodity price exposure (ethanol, corn)
- Revenue growth stabilization or acceleration
- Interest coverage ratio and debt refinancing capacity
- Return on equity and return on assets improvement trajectory
- Gross and operating margin trend
- Revenue growth and operating cash flow conversion
Alto Ingredients, Inc. (ALTO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The relatively thin 1.5% FCF margin may limit capital allocation flexibility. Strong liquidity with a 3.81x current ratio provides a solid financial cushion.
ALTO Profit Margin, ROE & Profitability Analysis
ALTO vs Materials Sector: How Alto Ingredients, Inc. Compares
How Alto Ingredients, Inc. compares to Materials sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Alto Ingredients, Inc. Stock Overvalued? ALTO Valuation Analysis 2026
Based on fundamental analysis, Alto Ingredients, Inc. has mixed fundamental signals relative to the Materials sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Alto Ingredients, Inc. Balance Sheet: ALTO Debt, Cash & Liquidity
ALTO Revenue & Earnings Growth: 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 Revenue Growth, EPS Growth & YoY Performance
ALTO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $224.7M | $4.3M | $0.05 |
| 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 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Alto Ingredients, Inc. Dividends, Buybacks & Capital Allocation
ALTO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Alto Ingredients, Inc. (CIK: 0000778164)
📋 Recent SEC Filings
❓ Frequently Asked Questions about ALTO
What is the AI rating for ALTO?
Alto Ingredients, Inc. (ALTO) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 80% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are ALTO's key strengths?
Claude: Strong liquidity position with 3.81x current ratio and 2.54x quick ratio providing financial flexibility. Positive operating and free cash flow generation ($4.2M and $3.3M respectively) demonstrating operational viability. ChatGPT: Strong liquidity profile with a 2.64x current ratio and 1.60x quick ratio. Moderate leverage and manageable debt burden, with debt/equity of 0.34x and interest coverage of 8.3x.
What are the risks of investing in ALTO?
Claude: Declining revenue trajectory (-4.9% YoY) with razor-thin profit margins (1.9% net, 1.1% operating, 4.1% gross) vulnerable to commodity price volatility. Extremely low returns on capital (1.7% ROE, 1.1% ROA) indicating poor capital efficiency and minimal shareholder value creation. ChatGPT: Revenue declined 4.9% year over year, suggesting weak top-line momentum. Profitability is very thin, with only 3.8% gross margin and 0.8% operating margin.
What is ALTO's revenue and growth?
Alto Ingredients, Inc. reported revenue of $224.7M.
Does ALTO pay dividends?
Alto Ingredients, Inc. does not currently pay dividends.
Where can I find ALTO SEC filings?
Official SEC filings for Alto Ingredients, Inc. (CIK: 0000778164) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is ALTO's EPS?
Alto Ingredients, Inc. has a diluted EPS of $0.05.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is ALTO's fundamental grade?
Based on our AI fundamental analysis in June 2026, Alto Ingredients, Inc. has a C grade with 80% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is ALTO stock overvalued or undervalued?
Valuation metrics for ALTO: ROE of 1.7% (sector avg: 14%), net margin of 1.9% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is ALTO's AI grade for 2026?
Our dual AI analysis gives Alto Ingredients, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is ALTO's free cash flow?
Alto Ingredients, Inc.'s operating cash flow is $4.2M, with capital expenditures of $909.0K. FCF margin is 1.5%.
How does ALTO compare to other Materials stocks?
Vs Materials sector averages: Net margin 1.9% (avg: 10%), ROE 1.7% (avg: 14%), current ratio 3.81 (avg: 1.6).