Verbio shares: Golden Cross – buy now?! Why the €10 mark will be crucial!

© Photo: AI-supported graphics

Biofuel producer Verbio is experiencing difficult times. After a dramatic drop in profits and heavy write-downs, the company is fighting to regain investor confidence.

But while the fundamentals look bleak, the technical charts are showing initial positive signs. A golden cross between the 50 and 200 SMA could signal a turnaround. The psychologically important €10 threshold acts as critical support. Can Verbio recover from this operational setback? New EU regulations and favorable US conditions are raising cautious hopes. Investors face a difficult decision: Is this the bottom and now things are looking up? Or are further losses looming?

When 66 million euros simply disappear

Verbio's figures for the 2024/2025 fiscal year speak for themselves. Instead of the promised mid-double-digit million-euro amount, EBITDA landed at a meager €14 million. Management had already revised its expectations downward during the year, but this magnitude shocked even pessimistic observers. The largest chunk of this loss was a non-cash impairment of €66 million. The main culprit was the straw biomethane plant in Iowa. Changing market conditions for cellulosic fuels and exploding investment costs during the coronavirus pandemic derailed the company's American plans. In addition, inventory write-downs weighed on earnings. The hoped-for recovery in GHG quota prices failed to materialize. Without these special effects, Verbio would have generated €31 million in EBITDA. Despite the losses, the balance sheet structure remains solid. With an equity ratio of over 50 percent and net financial debt of over €160 million, the company is not on the verge of collapse.

Chart technology

While the fundamentals appear bleak, the technical situation is developing more interestingly. After the price collapse in April to well below €10, the share stabilized at this psychologically important level. This support has proven robust in recent weeks. Particularly noteworthy is the recent golden cross. The 50-day moving average crossed the 200-day moving average from below to above. This technical signal is considered a bullish sign and indicates a possible trend reversal. While the price is still in an overall downtrend, the momentum appears to be slowing. If the €10 mark is sustained, a technical countermovement towards €12 to €13 could follow. The share could then even fly towards €16-18. A break of €10, on the other hand, would open up further downside potential to the next support level at €8.50 or even below.

New impetus through RED III

The challenging present overshadows existing future opportunities. The EU RED III directive is intended to give new impetus to the European biofuel market. The US Inflation Reduction Act also continues to offer tax incentives for biofuels. This regulatory support could lead to a market revival in the medium term. Verbio's diversified product range offers diverse prospects. While cellulosic fuels are currently under pressure, stillage biomethane is developing positively. The company is also working on innovative projects such as the world's first large-scale ethenolysis plant, which will convert biodiesel into chemical feedstocks.

What to do?

Verbio could rise. While the current fundamentals are sobering, the share price already reflects a considerable amount of pessimism. The technical development, with the golden cross and the stable €10 support level, indicates a potential bottoming out. Regulatory support and innovative projects offer long-term prospects. A speculative position is available for risk-tolerant investors. An entry near the €10 mark with a stop-loss at €8.40 limits the downside risk. Short-term price targets are €12 to €13. Overall, the stock is highly attractive at its current level!

Author: Felix Goldbach, FinanzNachrichten editorial team

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