On Monday, Stifel maintained its Buy rating and a $7.00 price target for shares of PureCycle Technologies (NASDAQ:PCT). The company recently announced the resumption of operations at its Ironton facility, which had been temporarily shut down for improvements. The facility, which reopened last week, implemented over 100 enhancements during its downtime in April and May.
The Ironton plant's production restarted with low polyethylene (PE) feed and initially achieved a rate of 5,500 pounds per hour. However, operations were interrupted for a week due to a storm-related power outage on May 22. The facility was back online on May 30, with production rates increasing to 6,000 pounds per hour.
Over the past four days, the Ironton facility has produced approximately 265,000 pounds of pellets, averaging a rate of about 2,800 pounds per hour, which translates to 22.6% utilization. Should the plant maintain the 6,000 pounds per hour production rate using low PE feed, the utilization rate would reach 49.1%.
The company is currently concentrating on maximizing uptime. The next phase involves testing the upgraded CP2 removal system to assess its capability to process higher PE content feed on a continuous basis. This step is crucial for PureCycle as it seeks to optimize its operations and production efficiency.
InvestingPro Insights
InvestingPro data sheds additional light on PureCycle Technologies' financial health and market performance as it ramps up operations. With a market capitalization of $882.42 million, the company's financial metrics reflect its growth stage, including a negative P/E ratio of -5.48, indicating that investors are currently valuing the company's growth potential despite it not being profitable in the last twelve months. The adjusted P/E ratio for the last twelve months as of Q1 2024 stands at -6.18, further emphasizing this point.
From an operational standpoint, the company's EBITDA for the last twelve months as of Q1 2024 was -$107.17 million, with a significant decrease in EBITDA growth of -34.1%. The stock price has experienced considerable volatility, with a 1-month price total return of -2.81% and a 3-month total return of -14.5%, although it has seen a 6-month total return of 12.1%, showing some signs of recovery.
Two InvestingPro Tips that can provide further context to investors are that analysts have recently revised their earnings downwards for the upcoming period, and PureCycle Technologies does not pay a dividend to shareholders, which may influence investment decisions for those seeking regular income. For those interested, there are 6 additional InvestingPro Tips available that could offer deeper insights into the company's future prospects. To explore these tips and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
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