Arq: Legacy Powdered Activated Carbon Business Back In Focus - Hold

Henrik Alex Investing Group Follow Summary Arq reported mixed second-quarter results with a small top line beat offset by weaker-than-expected profitability and persistently negative free cash flow. The company reiterated full-year guidance with revenues expected in a range of $120 million to $125 million and Adjusted EBITDA between $17 million and $20 million. While Arq intends to focus on its legacy PAC operations in the near term, management has not yet given up on plans to enter the higher-margin granular activated carbon market. With the strategic review still ongoing and substantial time and investment required to implement potential remediation measures, GAC production will remain paused until at least the end of next year. Given a number of initiatives to increase profitability of the legacy PAC business, I have tweaked my estimates and raised my price target from $2.00 to $2.35. Reiterating "Hold" rating. I do much more than just articles at Value Investor's Edge: Members get access to model portfolios, regular updates, a chat room, and more. Learn More » Kolidzei/iStock via Getty Images Note: I have covered Arq, Inc. ( ARQ ) previously, so investors should view this as an update to my earlier articles on the company. Arq Q2 Earnings Review Earlier this month, activated carbon products supplier Arq, Inc., or "Arq," This article was written by Henrik Alex 21.1K Followers Follow I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.