Quadrise Plc (LSE:QED) recently surprised investors with its share price jumping over 40% in June 2023 following its early trial results of using crude sugar oil (CSO) in its bioMSAR alternative fuel. Not only did engine efficiency improve by 7%, but it also led to a 16% decline in nitrogen oxide (NOx) emissions and a 50% decline in carbon monoxide emissions¹.

While the company’s chief executive was delighted with the result stating CSO products are potentially the most price-competitive net-zero biofuel solutions for the marine sector. The investors also received this news well, breaking the downward trend since October 2022.

Let’s dig deep into the company and evaluate whether the Quadrise share price can continue to surge in the future.

Key points

• Quadrise share price jumped 8% with the positive trial results using Crude Sugar Oil (CSO).
• The stock underwent a 4-fold increase from 2020 to 2021.
• The 12-month forecast shows a 482% potential increase in price.

What does Quadrise Plc do?

Quadrise is a UK -based company engaged in developing and marketing emulsion fuels, MSAR, and bioMSAR. These alternative fuels are being designed for use in power generation plants, industrial and upstream oil applications, and marine diesel engines. Its bioMSAR fuel combines MSAR technology with renewable glycerin to produce a low-carbon, environmentally friendly alternative to heavy fuel oil and biofuels.

The recent experiments with CSO products offer a compelling solution for the marine sector. As the early trial results are accelerating de-carbonisation and emission reduction economically and safely.

The bull case for the Quadrise share price

The alternative fuel offered by Quadrise hit the market in December 2020. The initial results came as early as February 2021, which were positive, announcing the fuel to be an efficient alternative. During this same period, Quadrise share price enjoyed a bullish cycle. From mid-2020, at a price of 1.23p, the stock rose up to 5.54p by mid-2021.

This bullish run continued in the year 2021 and finally came to an end when the stock hit 5.54p. During this one-year bullish period, the stock underwent an almost 4-fold increase. Unsurprisingly, investors started taking interest in the company’s stock when the fuel hit the market.

Obviously, this upward momentum and the recent share price spike are being driven by investor excitement rather than fundamentals. After all, the group has yet to establish a stable revenue stream. However, the recent trial results suggest the firm is on track to launch a commercial alternative fuel in the near future. And providing it lives up to expectations, the Quadrise share price could be set to surge.

The bear case for the Quadrise share price

The bear cycle of Quadrise’s share price started in mid-2021 and has been continuing to date. From the peak price of 5.4p, the stock has dropped to 1.148p, representing a 78% loss in stock value.

Beyond this volatility and lack of revenue, there are other risks to consider. While emulsified fuel is being used at a large scale, one of the biggest challenges with this product is the capability to contain and recover spilt oil. This is of particular importance today, especially with the intensive scrutiny of the adoption of ESG factors.

The fuel company is undoubtedly highly focused on reducing all toxic waste and gases, but even one oversight can cause a damaging scandal for them.

Quadrise share price prediction

Despite the high-risk profile, analysts are very optimistic about the future of the Quadrise share price. The 12-month price target takes the price of the company’s stock to as high as 6.4p, a whopping 482% increase from the current trading price.

This forecast needs to be taken with a pinch of salt since there appears to only be one institutional analyst following this tiny company. And to hit this milestone, a lot of things have to go write, especially in the current trading environment where investors are keeping businesses on a very short leash.

Should I buy Quadrise shares today?

Quadrise stock seems promising to look at the forecast. Moreover, the focus and development of the company’s management on key projects² further boost the credibility of the fuel company’s future, in my opinion.

The key projects include:

• An industrial demonstration test in Morocco is expected to begin soon.
• A bioMSAR hazard identification and operability study, recommended by Wärtsilä, is also being scheduled.
• The company is close to finalising terms for a supply license, services, and manufacturing unit with Valkor.

While the company is not generating profits, and cash reserves are also being actively used in production and development costs, I believe in the long run, Quadrise share price has the potential to surge if it can prove its product’s worth to customers. That’s why I’m planning on adding a small speculative position to my long-term growth portfolio.

Article sources

1. ProActive Investors. “Quadrise impressed by early results using CSO in biofuel“
2. ProActive Investors. “Quadrise sees positive progress at key projects“

Saima Naveed does not own shares in any of the companies mentioned. The Money Cog has no position in any of the companies mentioned. Views expressed on the companies and assets mentioned in this article are those of the writer and, therefore, may differ from the opinions of analysts in The Money Cog Premium services.