OPAL Fuels Roars Ahead in Q1—Is This a Green Light for Investors?

Let me break this down. OPAL Fuels just delivered a Q1 report that’s got all the hallmarks of a company hitting its stride. Revenue up 31%, net income doubling, andAdjusted EBITDA soaring—this isn’t just growth, folks, this is explosive momentum in the renewable energy sector. But hold on: are the risks worth the reward? Let’s dive in.

The Numbers Don’t Lie—But What Do They Mean?

OPAL’s Q1 revenue hit $85.4 million, a staggering jump from last year. The star here is RNG (Renewable Natural Gas) Fuel, which saw a 56% surge to $27.6 million. RNG is the fuel of the future for heavy-duty trucks and industrial sectors—think of it as the “green diesel” that’s finally scaling up. Pair that with a 38% increase in RNG production (1.1 million MMBtu) thanks to two new facilities, and you’ve got a company that’s not just talking sustainability—it’s delivering it.

But wait—there’s more! The Fuel Station Services segment, which supplies RNG and conventional fuels, grew by 36% to $50.7 million. The fact that RNG now makes up 48% of all GGEs dispensed (up from 47% last year) shows demand is real and rising. This isn’t a fad; it’s a structural shift in how industries power themselves.

The Hurdles—and Why They’re Manageable

No report is perfect, and OPAL isn’t immune to growing pains. The Renewable Power segment dipped to $7.1 million, likely due to market saturation in some regions. Plus, two California dairy projects hit construction delays. But here’s the key: these issues are localized, and management hasn’t quantified their financial impact. Meanwhile, the company’s $239.9 million in liquidity (including $178.4 million in unused credit) acts as a safety net.

The bigger picture? OPAL is doubling down on RNG, the segment with the highest margins and clearest demand. With projects like the Atlantic RNG facility (0.3 million MMBtu capacity) set to start in Q3 and three more (1.8 million MMBtu total) by 2026, the growth pipeline is bulletproof.

The Bottom Line: Is This Stock a Buy?

Let’s get to the brass tacks. OPAL’s stock price has been on a rollercoaster, but the fundamentals are screaming BUY.

Here’s why:
1. Revenue Growth: 31% Y/Y isn’t just a win—it’s a domino effect. As RNG production scales, margins will expand further.
2. Adjusted EBITDA: Up 33% to $20.2 million, proving OPAL can grow profitably.
3. IRA Incentives: The $8.9 million from its second ITC sale is just the start. The Inflation Reduction Act’s tax credits are a tailwind that won’t fade soon.
4. Liquidity: With $239.9 million on hand, OPAL can fund expansion without diluting shareholders.

The risks? Sure. Construction delays, policy shifts, and competition. But OPAL’s execution so far—beating Q1 guidance, hitting project timelines for the most part, and leveraging tax incentives—shows this isn’t a speculative play. This is a play for the future of energy, and the future is RNG.

Final Verdict: Full Throttle Ahead

OPAL Fuels isn’t just keeping up with the green energy revolution—it’s leading it. With 38% higher RNG production, a 33% EBITDA boost, and a project pipeline that adds 2.1 million MMBtu of capacity by 2026, this company is built for sustained growth.

The naysayers will focus on the $0.01 diluted loss per share, but that’s a paper problem when revenue is surging and the business is scaling. If you believe in RNG’s role in decarbonizing heavy transport—a $billion-dollar opportunity—OPAL is your ticket.

Bottom line: This isn’t a gamble. It’s a no-brainer investment in a sector that’s here to stay. The question isn’t whether OPAL will grow—it’s how fast you want to get onboard.

Investment decisions should be based on thorough research and professional advice. Past performance does not guarantee future results.