Up until last week, shares in renewable biofuels company Gevo (NASDAQ:GEVO) had slumped almost 70% from mid-February highs. For those who believed in the growth potential of the company, this represented a huge buying opportunity. However, after reporting Q1 earnings on May 13, GEVO stock has rallied.

More specifically, GEVO popped by about 24% the day after, followed by another double-digit gain on Monday. So, if you had been thinking about buying this stock on the dip, has your window of opportunity evaporated?

I don’t think so. True, GEVO stock’s rally has been impressive. Only a month ago, it was making news for crashing as clean energy stocks took a pounding. Since the company reported earnings, though, the stock is up 38% from its May 13 close. That’s despite the fact that revenue for the quarter was a fraction of what it reported a year ago.

What’s up with this renewable biofuels stock? Let’s find out.

GEVO Stock: What Does Gevo Do?

While the name isn’t familiar to most, Gevo has been in business since 2005. It’s also been a publicly traded company since 2011. Around the time it went public, the company dabbled in a number of businesses — including renewable packaging — and it had also completed construction of the world’s largest biojet fuel production facility. However, the company’s revenue was almost exclusively from the sale of ethanol.

Today, Gevo produces a wide line of low-carbon biofuels using plant matter. This includes sustainable aviation fuel, renewable diesel, renewable gasoline and renewable isooctane (used by high-performance automobiles). These biofuels are blended with traditional fossil-fuel equivalents for use, but Gevo is working toward making them standalone so that they can be a complete replacement. The company also produces high-protein animal feed.

However, what is really causing the excitement around Gevo is its Net Zero Projects, which were just announced this year. Leveraging the current U.S. goal of achieving a zero-emission economy, Gevo’s projects will combine its expertise in producing biofuels with sustainable power. The result would be biofuels that have a net-zero emission when burned.

The first project — Net-Zero 1 — would produce 45 million gallons per year of sustainable aviation fuel and renewable gasoline along with 350 million pounds of animal feed. An onsite wastewater biogas plant would supply 30% of the power needed to run the facility, while wind turbines would provide the remaining 70%. The cost to build Net-Zero 1 in South Dakota is estimated at $700 million to $800 million, but Gevo says it already has contracts lined up to buy $1.5 billion worth of biofuels from the plant.

So, to see why GEVO stock climbed so rapidly in early 2021, look no further than these Net Zero initiatives.

Q1 Results: It’s All About the Projects

As I noted before, Gevo reported its first-quarter 2021 results on May 13.

For the quarter, revenue was just $93,000 (down from $3.8 million the previous year). The company also had an operating loss of $9.9 million and an adjusted loss per share of 5 cents. All around, these were not the kind of results that you would expect to kick off a huge rally in GEVO stock.

However, news about Gevo’s projects is what really raised the market’s interest. In the report, Gevo said that the front-end engineering design for Net-Zero 1 was “on track and […] expected to be completed in December 2021.” That, of course, is good news. In addition, a new renewable natural gas (RNG) project broke ground in Iowa. That RNG plant is scheduled to start production in early 2022 and should contribute $9 million to $16 million in annual revenue beginning in late 2022.

Bottom Line on GEVO Stock

There aren’t a lot of investment analysts offering coverage of GEVO stock at this point. For what it’s worth, CNN Money is tracking two of them. They both rate GEVO as a buy and their median price target of $17 offers an upside of almost 160%. If these analysts are correct, buying shares now would certainly pay off — even after the recent gains.

Of course, it’s not that straightforward. So much of Gevo’s valuation is tied up in expectation. But there are positive signs that the company is going to succeed — including progress on Net-Zero 1 and the Iowa RNG project. And, with over $525 million in cash and equivalents, Gevo is well-financed to see these big projects through to completion.

In the meantime, GEVO stock rates a “B” in Portfolio Grader. While not perfect, it has some serious long-term growth potential. Plus, even after a big two-day rally, GEVO shares are still trading at less than half their February levels.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.

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