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On Friday, Craig-Hallum adjusted its price target for Ameresco (NYSE:AMRC) to $34 from the previous $40 while maintaining a Buy rating on the stock. The firm’s analyst, Eric Stine, cited Ameresco’s guidance for 2025, which fell below market expectations, as a significant factor in the decision. This conservative outlook is attributed to potential disruptions in the company’s Projects business, stemming from the unpredictability of funding priorities by the Trump Administration. The stock, currently trading near its 52-week low at $12.76, has seen a significant decline of approximately 40% over the past six months, according to InvestingPro data.
Despite the reduced guidance, Ameresco reported a milestone in its fourth quarter, converting over $1 billion of awards into its backlog. Furthermore, the company’s contracted Project backlog has nearly doubled in the past two years, reaching $2.5 billion, and its overall revenue visibility stands at a record $9.5 billion. These achievements underscore the company’s position, though InvestingPro data reveals the company operates with a significant debt burden, with a debt-to-equity ratio of 2.42. The company has maintained profitability over the last twelve months, with a gross profit margin of 15.7%.
Stine’s commentary highlighted that while the current political climate introduces a level of uncertainty for Ameresco, the company has only experienced a modest impact on its Federal business to date. The analyst emphasized that Ameresco’s long-term outlook remains solid, supported by its substantial visibility in multi-year and multi-billion-dollar contracts. InvestingPro analysis shows strong revenue growth of 32.7% in the last twelve months, with analysts anticipating continued sales growth this year. Get access to 13 additional ProTips and comprehensive analysis in the Pro Research Report, available exclusively to subscribers.
The firm’s reiteration of the Buy rating suggests confidence in Ameresco’s future performance, even as it navigates through the challenges posed by the present administration’s fluctuating funding priorities. The analyst’s perspective points to an underlying health in Ameresco’s business operations and its ability to sustain growth over time.
Craig-Hallum’s new price target reflects a more cautious valuation of Ameresco’s stock in the short term but maintains a positive view on the company’s potential for growth and profitability in the longer term.
In other recent news, Ameresco, Inc. reported its fourth-quarter 2024 earnings, exceeding analysts’ expectations with an earnings per share (EPS) of $0.88, compared to the forecasted $0.78. The company also reported a revenue of $533 million, surpassing the anticipated $523.61 million, marking a 21% increase year-over-year. Despite these positive financial results, the company’s stock experienced a decline in aftermarket trading. Ameresco’s project backlog saw a significant growth of 24% year-over-year, indicating robust future prospects. The company’s full-year revenue increased by 29%, with net income rising by 15%, reflecting strong operational performance. Adjusted EBITDA for the quarter was reported at $87.2 million, a 59% increase from the previous year. The company also set a revenue guidance of $1.9 billion for 2025, with an adjusted EBITDA target of $235 million. Analysts have noted these developments, with firms like Stifel and Oppenheimer engaging in discussions about Ameresco’s future growth and market environment.
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