Cantor Fitzgerald Commences Coverage of Ameresco with Overweight Rating

In a recent development, Cantor Fitzgerald has started coverage on Ameresco, a New York Stock Exchange-listed entity specializing in the clean energy sector, assigning an Overweight rating and setting a price target of $41.00 per share. This valuation reflects an anticipated 25% increase above the current market price of $32.72. Notably, Ameresco’s stock has appreciated significantly, surging nearly 67% over the last six months, although current valuations indicate the share price is slightly above its fair economic value, as per InvestingPro analysis.

Described by Cantor Fitzgerald as a distinctive platform combining clean energy infrastructure with integrated engineering, procurement, and construction (EPC) capabilities alongside long-term asset ownership and management, Ameresco stands out in its sector. This hybrid model enables it to capture value both during project development and through continuous operations.

Approximately two-thirds of Ameresco’s earnings before interest, taxes, depreciation, and amortization (EBITDA) derive from recurring revenue streams, specifically through energy assets and operations and maintenance (O&M) agreements. This revenue composition offers investors enhanced cash flow predictability and stability amid an expanding portfolio of assets held by the company.

The existing asset portfolio comprises 765 megawatts (MW) currently operational and another 626 MW under development. The company’s client base spans federal, municipal, utility, and commercial sectors, contributing to a diversified and resilient income base. As more projects move into commercial operation, Ameresco is positioned to increase its recurring EBITDA, reinforcing revenue stability.

From a financial health perspective, the company maintains a current ratio of 1.51, indicating sufficient liquid assets to cover short-term liabilities. However, it bears considerable indebtedness, with a debt-to-equity ratio of 2.33, reflecting leveraged capital structure considerations.

Cantor Fitzgerald further underscores Ameresco’s strategic preference for contracted cash flows supported by non-recourse financing arrangements. This approach is designed to foster sustainable long-term value creation while mitigating risk at the corporate balance sheet level.

Valuation metrics reveal a price-to-earnings (P/E) ratio of 27.51 and comparatively low gross profit margins at 14.67%, the latter potentially reflecting the capital-intensive nature of the business. InvestingPro’s comprehensive research platform offers deeper insights and an extensive report on Ameresco among over 1,400 US equities assessed.

Ameresco has recently reported significant operational advancements, including a collaboration with Republic Services to inaugurate a renewable natural gas facility located in East Moline, Illinois, which is projected to yield upwards of 500,000 dekatherms annually. Additionally, the company completed solar energy installations across seven schools within the Orange Unified School District in California, anticipated to generate cumulative savings of $6.3 million over a 25-year period for the district.

Market analysts have responded favorably to these developments. UBS has revised its price target upwards to $40, citing Ameresco’s substantial order backlog valued at $5.1 billion and robust demand for clean energy initiatives. Stifel has increased its target price to $37, highlighting earnings before interest, taxes, depreciation, and amortization (EBITDA) performance that surpassed forecasts. Jefferies also lifted its target to $45, following an earnings report that exceeded expectations on both revenue and EBITDA metrics.

These acknowledgments from prominent brokerage firms reiterate Ameresco’s steady growth trajectory and its expanding role in delivering clean energy solutions. The company’s business model and operational milestones reflect the broader trends favoring sustainable infrastructure development and energy resilience in both public and private sectors.