LanzaTechGlobal FallsShort of Q1 2024 Expectations Despite Growth Forecast

LanzaTech reported disappointing Q1 2024 financial results, missing analyst estimates for revenue and earnings. Despite the earnings miss, the company reiterated its full-year 2024 financial guidance, anticipating 55% year-over-year revenue growth.

Nitish Verma
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LanzaTechGlobal FallsShort of Q1 2024 Expectations Despite Growth Forecast

LanzaTechGlobal FallsShort of Q1 2024 Expectations Despite Growth Forecast

LanzaTech Global Inc. (NASDAQ: LNZA) reported disappointing first quarter 2024 financial results on Thursday, missing analyst estimates for both revenue and earnings. The carbon recycling company posted revenue of $10.2 million, falling 8% short of expectations, and a loss per share of $0.13, wider than the consensus forecast by 5.4%.

Why this matters: The growth of companies like LanzaTech is crucial for the transition to a low-carbon economy, and their success or failure can have significant implications for the environment and the economy as a whole. As the demand for sustainable materials and fuels continues to rise, companies like LanzaTech will play a critical role in shaping the future of industries such as aviation and energy.

Despite the earnings miss, LanzaTech reiterated its full-year 2024 financial guidance, anticipating revenue in the range of $90 to $105 million. This would represent robust year-over-year growth of approximately 55% at the midpoint. Looking further ahead, the company is forecasting average annual revenue growth of 42% over the next three years, significantly outpacing the 6.8% growth projected for the broader U.S. commercial services industry.

In a conference call with analysts, CEO Dr. Jennifer Holmgren highlighted several key developments in the quarter. These included the Department of Energy awarding LanzaTech's partner, Technip Energies, a $200 million grant for Project SECURE, which aims to produce sustainable ethylene from captured carbon dioxide emissions. Dr. Holmgren also noted the inauguration of the world's first ethanol-to-sustainable aviation fuel (SAF) facility by LanzaJet, in which LanzaTech holds a 25% stake.

"The first quarter was extraordinary for sustainable aviation fuel,"said Dr. Holmgren. "With the opening of LanzaJet's Soperton, Georgia facility, we are ushering in a new era of lower-carbon travel. "She added that LanzaTech is completing a $100 million investment round to accelerate growth, with commitments from the Microsoft Climate Innovation Fund and Southwest Airlines.

LanzaTech, founded in 2005, has developed proprietary microbes and a fermentation process to convert carbon-rich waste gases into fuels and chemicals. The company has forged partnerships with major corporations including Shell, ArcelorMittal, and Virgin Atlantic to scale up its technology. In 2022, LanzaTech went public through a SPAC merger at a $2.2 billion valuation.

Investors reacted negatively to LanzaTech's Q1 results, sending shares down 15% in Thursday's trading. However, Wall Street analysts remain largely bullish on the stock, with six out of eight rating it a "buy." The average analyst price target of $11.50 implies over 200% upside from current levels. While LanzaTech faces execution risks as it ramps up production, the company's unique carbon recycling technology and blue-chip partnerships position it to capitalize on the growing demand for sustainable materials and fuels in the coming years.