Vertex Energy, Inc. (VTNR) | Investment Case

1. Company Snapshot

1.a. Company Description

Vertex Energy, Inc., an environmental services company, provides a range of services designed to aggregate, process, and recycle industrial and commercial waste systems in the Gulf Coast and Central Midwest regions of the United States.The company operates through Black Oil, Refining and Marketing, and Recovery segments.The Black Oil segment collects and purchases used motor oil directly from third-party generators; aggregates used motor oil from a network of local and regional collectors; and sells used motor oil to customers for use as a feedstock or replacement fuel for industrial burners.

The segment also produces and sells a vacuum gas oil product to refineries and marine fuels market; and base oil product to lubricant packagers and distributors.The Refining and Marketing segment gathers hydrocarbon streams in the form of petroleum distillates, transmix, and other chemical products that are purchased from pipeline operators, refineries, chemical processing facilities, and third-party providers; and sells end products, such as gasoline blendstock, pygas, and fuel oil cutter stock to oil companies or to petroleum trading and blending companies.The Recovery segment sells ferrous and non-ferrous recyclable metal products, and markets Group III base oils and other petroleum-based products, as well as provides transportation and marine salvage services.

Vertex Energy, Inc.was founded in 2001 and is headquartered in Houston, Texas.

Show Full description

1.b. Last Insights on VTNR

Vertex Energy, Inc.'s recent performance was negatively driven by the initiation of bankruptcy proceedings and a Restructuring Support Agreement (RSA) with its term loan lenders. The company entered into a RSA with 100% support from its lenders, aiming to achieve a sustainable capital structure. This move was facilitated by $80M Debtor-in-Possession financing to continue day-to-day operations. Additionally, the company commenced Chapter 11 cases, indicating a formal pathway towards restructuring.

1.c. Company Highlights

Last Price	0.05
Change Percentage	-51.53%
Open	0.08
Previous Close	0.11
Market Cap ( Millions)	5
Volume	19103175
Year High	5.04
Year Low	0.05
M A 50	0.42
M A 200	1.18

FCF Yield	-4149.51%
Dividend Yield	0.00%
ROE	-39.71%
Debt / Equity	178.48%
Net Debt / EBIDTA	4950.85%
Price To Book	0.02
Price Earnings Ratio	-0.06
Price To FCF	-0.02
Price To sales	0.0
EV / EBITDA	50.4

2. Transcript Summary

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3. NewsRoom

The Rosen Law Firm, P.A. Announces Proposed Class Action Settlement on Behalf of Purchasers of Vertex Energy, Inc. Common Stock - VTNRQ

May -19

Source: globenewswire.com

Vertex Energy, Inc. Successfully Emerges From Chapter 11 With Renewed Sustainable Capital Structure

Jan -22

Source: businesswire.com

Vertex Energy Initiates Bankruptcy Proceedings, Shares Plunge

Sep -27

Source:

Vertex Energy and Its Lenders Initiate Formal Pathway Aimed at Achieving Sustainable Capital Structure

Sep -24

Source: businesswire.com

Vertex Energy, Inc. (VTNR) Q2 2024 Earnings Call Transcript

Aug -08

Source: seekingalpha.com

Vertex Energy (VTNR) Upgraded to Buy: What Does It Mean for the Stock?

Jul -10

Source: zacks.com

Vertex Energy, Inc. (VTNR) Q1 2024 Earnings Call Transcript

May -09

Source: seekingalpha.com

Top 3 Energy Stocks That Could Blast Off This Month - RPC (NYSE:RES)

May -03

Source: Benzinga

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.82%)

6. Segments

Refining and Marketing

Expected Growth: 4.83%

Vertex Energy's Refining and Marketing segment growth of 4.83% is driven by increased demand for refined products, strategic acquisitions, and optimized refinery operations. Additionally, favorable crude oil prices, improved refining margins, and a strong marketing and logistics network contribute to the segment's growth.

Black Oil & Recovery

Expected Growth: 4.65%

Vertex Energy's 4.65% growth in Black Oil & Recovery is driven by increasing demand for used motor oil re-refining, strategic acquisitions, and expansion into new markets. Additionally, the company's focus on sustainability and environmental stewardship resonates with customers, contributing to revenue growth.

Corporate and Eliminations

Expected Growth: 3.83%

Vertex Energy's Corporate and Eliminations segment growth of 3.83% is driven by increased focus on cost optimization, strategic investments in digital transformation, and improved operational efficiencies. Additionally, the company's efforts to streamline its organizational structure and reduce overhead costs have contributed to this growth.

7. Detailed Products

Refined Products

Vertex Energy, Inc. produces and sells refined products such as gasoline, diesel fuel, and jet fuel to wholesalers, retailers, and commercial customers.

Base Oils

The company manufactures and sells base oils, which are used as a raw material in the production of lubricants, greases, and other petroleum-based products.

Marine Fuel

Vertex Energy, Inc. supplies marine fuel to the maritime industry, including cargo ships, tankers, and cruise liners.

Lubricants

The company produces and sells lubricants, including motor oils, transmission fluids, and gear oils, for use in various industrial and automotive applications.

Recycling Services

Vertex Energy, Inc. offers used oil collection and recycling services, helping to conserve natural resources and reduce waste.

8. Vertex Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Vertex Energy, Inc. operates in the energy industry, which has a moderate threat of substitutes. The company's products and services can be substituted with alternative energy sources, but the switching costs are relatively high.

Bargaining Power Of Customers

Vertex Energy, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The company's customers are also relatively small, which further reduces their bargaining power.

Bargaining Power Of Suppliers

Vertex Energy, Inc. relies on a few large suppliers for its raw materials, which gives them some bargaining power. However, the company's size and scale of operations also give it some negotiating power.

Threat Of New Entrants

The energy industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to enter the market and compete with Vertex Energy, Inc.

Intensity Of Rivalry

The energy industry is highly competitive, with many established players competing for market share. Vertex Energy, Inc. faces intense competition from its rivals, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	51.66%
Debt Cost	12.05%
Equity Weight	48.34%
Equity Cost	12.05%
WACC	12.05%
Leverage	106.85%

11. Quality Control: Vertex Energy, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Star

A-Score: 7.3/10

Value: 8.4

Growth: 5.8

Quality: 5.2

Yield: 10.0

Momentum: 5.5

Volatility: 9.0

1-Year Total Return ->

World Kinect

A-Score: 5.7/10

Value: 9.6

Growth: 4.7

Quality: 3.7

Yield: 5.0

Momentum: 3.0

Volatility: 8.0

1-Year Total Return ->

Par Pacific

A-Score: 4.4/10

Value: 5.8

Growth: 5.4

Quality: 2.1

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Vertex Energy

A-Score: 3.7/10

Value: 10.0

Growth: 3.7

Quality: 3.4

Yield: 0.0

Momentum: 5.0

Volatility: 0.3

1-Year Total Return ->

Clean Energy Fuels

A-Score: 3.5/10

Value: 7.2

Growth: 5.0

Quality: 2.8

Yield: 0.0

Momentum: 3.5

Volatility: 2.3

1-Year Total Return ->

Aemetis

A-Score: 3.4/10

Value: 9.6

Growth: 1.7

Quality: 5.2

Yield: 0.0

Momentum: 3.0

Volatility: 1.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

17.39%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

12.05%

Vertex Energy, Inc. - US92534K1079

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on VTNR

1.c. Company Highlights

Weak Momentum

Cheaper

More Volatile

Earnings Beats

Earnings Miss

Revenues Beats

Lower Quality

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.82%)

6. Segments

Refining and Marketing

Expected Growth: 4.83%

Black Oil & Recovery

Expected Growth: 4.65%

Corporate and Eliminations

Expected Growth: 3.83%

7. Detailed Products

Refined Products

Base Oils

Marine Fuel

Lubricants

Recycling Services

8. Vertex Energy, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Vertex Energy, Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.05$

Current Price

0.05$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA