Clear Street has opened coverage on Evolution Metals & Technologies (NASDAQ: EMAT) with a Buy recommendation and a $30.00 price target, basing that target on a valuation equal to 10 times the firm's 2028 EBITDA estimate of $2.5 billion.
In its initiation note, Clear Street describes Evolution Metals as a potential disruptor in the U.S. critical metals sector and anticipates the company becoming a leading turnkey provider across midstream separation, refining, processing and recycling, operating on a closed-loop circular model.
The analyst team applied the 10x multiple to arrive at the $30 target while accounting for substantial planned capital expenditures. Clear Street's forecast assumes Evolution Metals will seek roughly $2.5 billion to fund its U.S. build-out and that financing will include issuing about 200 million new shares. The firm incorporated the resulting dilution into its valuation at a recent share price near $10, which the note indicates is similar to the company’s early January Nasdaq listing price.
Clear Street laid out a phased revenue ramp tied to the planned expansion. The firm expects EMAT to generate $33 million in revenue this year from international operations. It projects $733 million in revenue in 2027, reflecting partial-year U.S. operations from E-Scrap, lithium battery recycling and precious metals activities. For 2028 the firm models $4.9 billion in revenue with partial-year contributions from U.S. permanent high-performance magnet production, and it forecasts $6.7 billion for 2029 assuming full-year U.S. operations.
The initiation note highlights balance sheet and valuation considerations as well. Evolution Metals carries a market capitalization of $6.1 billion and, according to InvestingPro Fair Value metrics cited in the material, appears overvalued on current measures. The company was not profitable over the last twelve months. Clear Street also noted a current ratio of 0.16, indicating near-term liabilities exceed liquid assets, which helps explain the anticipated need for external capital.
Operational timing in the Clear Street scenario depends on securing financing. The firm stated U.S. revenue could begin in late third quarter 2027 if the capex program is funded. The initiation also points out that EMAT posts a beta of -0.07, indicating the stock has historically tended to move in the opposite direction of the broader market.
Investors seeking further context on the growth outlook are directed to additional insights and models referenced in the analysis; the firm notes InvestingPro provides seven further items to help evaluate these projections against current financials. Evolution Metals’ next scheduled earnings release is expected on May 18, which Clear Street suggests may clarify financing progress and operational milestones.
Key points
- Clear Street starts coverage with a Buy rating and a $30 price target based on 10x a 2028 EBITDA estimate of $2.5 billion.
- Forecasts assume a roughly $2.5 billion U.S. capex program financed in part by issuing approximately 200 million shares, with dilution reflected at a recent $10 share price.
- Revenue ramp: $33 million this year (international), $733 million in 2027 (partial U.S.), $4.9 billion in 2028, and $6.7 billion in 2029 (full U.S. ops).
Risks and uncertainties
- Financing risk - the model assumes substantial capital is secured; failure to raise the forecasted funds would affect the timing and scale of U.S. operations and revenues.
- Liquidity and solvency considerations - a current ratio of 0.16 signals short-term obligations exceed liquid assets, increasing near-term balance sheet pressure.
- Valuation and profitability - despite the Buy rating, InvestingPro Fair Value metrics mark the company as overvalued and the company was not profitable over the past twelve months, which may affect investor reception.
Markets and sectors affected include mining and critical materials processing, recycling and advanced manufacturing supply chains tied to permanent magnets and battery materials.