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Ameresco (AMRC)
NYSE:AMRC
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Ameresco
(NYSE:AMRC)66Neutral
Positive Factors
Financial performance
Ameresco reported 4Q24 sales that exceeded expectations, driven by growth across all business lines, especially Projects and Energy Assets.
Project completion
Ameresco announced that it has achieved 'substantial completion' in 2 out of 3 of its BESS (battery energy storage system) projects with SCE.
Negative Factors
Contract cancellations
Concerns on the Project biz seem to have been validated after management announced a cancellation on one project and a 'pause' on two other contracts.
Ameresco (AMRC) vs. S&P 500 (SPY)
Market Cap
$488.11M
Dividend YieldN/A
Average Volume (3M)695.53K
Price to Earnings (P/E)10.4
Beta (1Y)1.68
Revenue Growth28.76%
EPS Growth-9.56%
CountryUS
Employees1,503
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)1.06
Shares Outstanding34,541,214
10 Day Avg. Volume1,438,216
30 Day Avg. Volume695,531
Financial Highlights & Ratios
PEG Ratio1.34
Price to Book (P/B)N/A
Price to Sales (P/S)0.28
Price to Cash Flow (P/CF)6.60
P/FCF Ratio3.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$20.33Price Target Upside83.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
Ameresco Business Overview & Revenue Model
Company DescriptionAmeresco, Inc. (AMRC) is a leading clean technology integrator and renewable energy asset developer, owner, and operator. The company operates in sectors such as energy efficiency, infrastructure upgrades, asset sustainability, and renewable energy solutions. Ameresco provides a comprehensive range of services, including design, engineering, installation, and maintenance of energy projects, aimed at helping organizations reduce energy consumption, lower carbon footprints, and achieve sustainability goals.
How the Company Makes MoneyAmeresco makes money primarily through its energy services agreements and renewable energy projects. Its revenue model is built on providing energy efficiency solutions and renewable energy infrastructure to governmental, commercial, industrial, and institutional clients. Key revenue streams include long-term energy savings performance contracts, renewable energy asset ownership and operation, and the sale of renewable energy credits. The company also benefits from various government incentives and programs that promote energy efficiency and renewable energy use. Significant partnerships with public sector entities and private organizations further contribute to its earnings by expanding project opportunities and enhancing service offerings.
Ameresco Financial Statement Overview
Summary
Ameresco demonstrates strong revenue growth and improved operational efficiency, evidenced by rising EBIT margins. The balance sheet reflects robust equity but increasing debt levels pose a risk. Cash flow improvements are notable, although historical volatility suggests potential liquidity concerns.Income Statement
Ameresco's income statement shows positive revenue growth with a 28.76% increase from 2023 to 2024 and improved EBIT margin from 5.98% in 2023 to 6.14% in 2024, indicating better operational efficiency. However, the net profit margin slightly decreased to 3.21% due to higher expenses, which tempers the overall financial performance.76
Positive
Balance Sheet
The balance sheet reflects a strong equity position with a debt-to-equity ratio of 0.99, indicating balanced leverage. The equity ratio improved to 41.45%, suggesting solid asset backing. However, the significant increase in total debt over the years poses a potential risk to financial stability.68
Positive
Cash Flow
Ameresco's cash flow statement shows a significant recovery in free cash flow to $113.3 million in 2024 from a negative position in previous years. The operating cash flow to net income ratio is 2.07, reflecting strong cash generation relative to net income. Despite these improvements, the volatility in past cash flows suggests potential liquidity concerns.62
Positive
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.74B | 1.77B | 1.37B | 1.82B | 1.22B | 1.03B | Gross Profit |
| 279.81M | 256.09M | 246.43M | 290.83M | 230.36M | 187.55M | EBIT |
| 114.14M | 108.75M | 82.22M | 132.99M | 95.43M | 71.50M | EBITDA |
| 182.37M | 108.75M | 150.65M | 187.38M | 144.15M | 114.66M | Net Income Common Stockholders |
| 95.23M | 56.76M | 62.47M | 94.93M | 70.46M | 54.05M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 108.52M | 108.52M | 79.27M | 115.53M | 50.45M | 66.42M | Total Assets |
| 4.16B | 4.16B | 3.71B | 2.88B | 2.22B | 1.75B | Total Debt |
| 1.70B | 1.70B | 1.55B | 937.65M | 497.53M | 422.44M | Net Debt |
| 1.59B | 1.59B | 1.47B | 822.11M | 447.08M | 356.02M | Total Liabilities |
| 3.11B | 2.43B | 2.74B | 1.96B | 1.47B | 1.26B | Stockholders Equity |
| 1.01B | 1.72B | 901.98M | 824.03M | 704.26M | 492.81M |
| Cash Flow | Free Cash Flow | ||||
| -593.97M | 113.31M | -621.76M | -666.19M | -356.07M | -285.34M | Operating Cash Flow |
| -383.66M | 117.60M | -69.99M | -338.29M | -172.30M | -102.58M | Investing Cash Flow |
| -231.79M | -386.64M | -566.94M | -328.36M | -205.26M | -181.01M | Financing Cash Flow |
| 634.21M | 313.94M | 640.80M | 730.23M | 365.46M | 305.17M |
Ameresco Technical Analysis
Negative
11.09
Price Trends
20.74
Negative
24.67
Negative
28.28
Negative
Market Momentum
-3.12
Positive
26.83
Positive
9.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AMRC, the sentiment is Negative. The current price of 11.09 is below the 20-day moving average (MA) of 16.55, below the 50-day MA of 20.74, and below the 200-day MA of 28.28, indicating a bearish trend. The MACD of -3.12 indicates Positive momentum. The RSI at 26.83 is Positive, neither overbought nor oversold. The STOCH value of 9.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AMRC.
Ameresco Risk Analysis
Ameresco disclosed 44 risk factors in its most recent earnings report. Ameresco reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ameresco Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
68 Neutral | $7.78B | 83.49 | 11.30% | ― | -41.92% | -76.24% | |
67 Neutral | $144.01B | 20.75 | 14.24% | 3.02% | 26.91% | -6.43% | |
66 Neutral | $488.11M | 10.43 | 5.92% | ― | 28.76% | -9.56% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
47 Neutral | $941.70M | ― | -116.01% | ― | -68.86% | -4917.87% | |
46 Neutral | $1.56B | ― | -73.12% | ― | -9.83% | -71.44% |
* Industrials Sector Average
Performance Comparison
AMRC
Ameresco
11.09
-10.23
-47.98%
ENPH
Enphase Energy
61.63
-67.06
-52.11%
NEE
NextEra Energy
72.83
16.55
29.41%
SEDG
SolarEdge Technologies
16.85
-57.64
-77.38%
RUN
Sunrun
7.16
-4.86
-40.43%
Ameresco Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: -39.50% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Neutral
Ameresco reported strong revenue and adjusted EBITDA growth, with record project backlog and successful expansion into Europe. However, significant challenges were encountered with legacy projects and federal contracting delays, impacting gross margins and causing financial strain. Despite these issues, the company remains optimistic about its diversified and resilient business model.Highlights
Strong Revenue and Adjusted EBITDA Growth
Ameresco ended 2024 with annual revenue growth of 29% and adjusted EBITDA growth of 38%. The fourth quarter results showed 21% revenue growth and 59% adjusted EBITDA growth.
Record Project Backlog and Energy Assets
The contracted backlog increased by 92% year-over-year with a record $1.1 billion in conversions. Total project backlog grew by 24% to $4.8 billion. Additionally, 31 megawatts of energy assets were brought into operation, totaling 241 megawatts for the year.
Successful Sale of Non-core AEG Business
The sale of the non-core AEG business contributed to the quarter's results, resulting in a gain of approximately $38 million.
European Expansion Success
Ameresco's revenue from its expanding European business exceeded $250 million in 2024.
Positive Financial Performance Metrics
Operating income increased by 31%, and net income attributable to common shareholders grew by 15%.
Lowlights
Challenges with Legacy Projects
Two large legacy projects encountered schedule delays and significant inflation, leading to unrecoverable cost overruns impacting gross profit by approximately $20 million in the quarter and $38 million for the full year.
Federal Contracting Delays
Ameresco experienced a cancellation of one federal project and a pause on two others due to changes in the federal workforce. Anticipated additional delays were factored into 2025 guidance.
Gross Margin Impact
Gross margin for the quarter was significantly lower than expected at 12.5% due to cost overruns on the two projects.
D3 RIN Price Weakness
D3 RIN prices weakened at the end of 2024 due to the EPA's proposed rule to partially waive the 2024 cellulosic biofuel volume requirement.
Company Guidance
During Ameresco's fourth-quarter and full-year 2024 earnings call, the company reported strong financial performance, including annual revenue and adjusted EBITDA growth of 29% and 38%, respectively. They highlighted a record project backlog, with a 92% increase in contracted backlog year-over-year, reaching $4.8 billion, and a record 241 megawatts of energy assets placed in operation. For the fourth quarter, revenue grew by 21%, and adjusted EBITDA increased by 59%, driven by robust performance in projects and energy asset businesses and the successful sale of their non-core AEG business. Despite challenges from two large legacy projects impacting results, Ameresco's strategic focus on execution, backlog growth, and geographical expansion into Europe, which generated over $250 million in 2024, supports a resilient business model. The guidance for 2025 anticipates revenue of $1.9 billion and adjusted EBITDA of $235 million, with expected placements of 100 to 120 megawatts of energy assets and continued demand from federal agency customers amidst policy changes.Ameresco Corporate Events
Private Placements and FinancingBusiness Operations and Strategy
Ameresco Expands Credit Facility for Growth Initiatives
Positive
Jan 28, 2025
On January 23, 2025, Ameresco, Inc. announced the refinancing and expansion of its term loan and revolving credit facility through a sixth amended and restated senior secured credit agreement. This agreement replaces the existing credit framework and adds international banking partners to support the company’s growth in Europe. The new facilities include a $225 million revolving credit facility and a $100 million term loan, both maturing in December 2028, providing increased financial flexibility for Ameresco to pursue growth initiatives and strategic objectives. The refinancing underscores lender confidence in Ameresco’s business model and future prospects, with proceeds earmarked for general corporate purposes such as acquisitions, debt refinancing, and working capital requirements.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.