Is PureCycle Technologies, Inc. (PCT) Stock a Solid and Long-term Investment?

PureCycle Technologies, Inc. (PCT) holds an international license to market the exclusive solvent-based purification recycling technology, to restore waste polypropylene into an ultra-pure resin. The procedure eliminates contaminants, color, and odor resulting in ultra-pure polypropylene. The company comes under the chemicals commodity industry and is ranked at 19th spot out of a total of 24 companies. The international commodity chemicals market volume was worth $2722 billion in 2018 and is anticipated to grow with a CAGR of more than 6.50% from 2019 to 2026.

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PCT: Recent Developments

PCT announced on March 22, the potential expansion of its second UPR resin facility in Georgia. Preliminary construction activities commenced with immediate effect following the groundbreaking ceremony. The facility will help in the transformation of number 5 plastic waste into a sustainable material utilized in the making of several consumer-based products.

PCT: Earnings

The company has not reported any revenue for fiscal 2021, while its per-share earnings are recorded to be -$0.75 with a drastic 572% decline from fiscal 2020. The annual revenue and EPS outlook for fiscal 2022 showed optimism with $2.03 million in revenue and -$0.48 EPS.

Comparison with Peers

When PCT’s price performance of one year is compared with its peers including ASIX, WLKP, OEC, KRO, and ORGN, the best performer stood to be ASIX (48.8%), then come WLKP (-1.9%), KRO (-11.7%), OEC (-23.3%), and ORGN (-37.2%). PCT remained the lowest performer (-71.1%) in its price.

Insider Transactions, Analyst Ratings, and Risk Factors

PCT owns 163.2 million outstanding shares, of which the major number of shares are owned by certain institutional investors i.e., 45.1%, while 28.4% shares are being possessed by the company’s employees. Most recently, 5 wall street journal analysts gave PCT a rating of ‘Buy’ based on past observations and futuristic approaches. Certain risk factors are linked with the company’s stock including a no current revenue, non-profitability over the next three years, very fluctuating share price over the last three months, and dilution of the shareholders in the past year.

Bottom Line

PCT is expecting an earnings increase of 56.6% per year for the next three years, while its revenue may grow at a rate of 73.6% per year. Although the company is economically feeble, it has great potential to develop.