Bullish indicating open at $55-$60, IPO prices at $37
On Monday, Citi analyst Scott Gruber maintained a Neutral rating on Atlas (NYSE:ATCO) Energy Solutions Inc (NYSE:AESI) with a steady price target of $22.00. Atlas Energy, currently trading near its 52-week high with a market capitalization of $2.64 billion, announced the acquisition of Moser Energy Systems, a provider of distributed power solutions, for $220 million. According to InvestingPro data, the company has demonstrated impressive growth with a 48.67% revenue increase over the last twelve months. Moser Energy operates a fleet of approximately 212 megawatts of natural gas-powered generation assets and has capabilities in manufacturing and service.
Gruber noted that the acquisition should be financially beneficial for Atlas, as it was secured at a multiple of approximately 4.3 times, compared to Atlas Energy's 2025 estimated multiple of about 7.9 times. With InvestingPro analysis showing the company operates with moderate debt levels and maintains a healthy current ratio of 1.23, the transaction is expected to diversify Atlas Energy's portfolio and provide access to a growth area with ties to oil production.
The analyst commended Atlas management for the acquisition, highlighting Moser's impressive EBITDA margin of over 50%, which should enhance Atlas's financials. However, Gruber also mentioned that investors are looking for more information from Atlas management regarding the similarities and differences between Moser's business and Atlas's existing operations, their market strategy, potential operational synergies, growth plans, capital needs, and the anticipated impact on cash returns.
Additional details provided by management about these factors are anticipated to influence Atlas Energy's stock performance today. Atlas Energy's strategic move is expected to bring clarity to investors as they assess the potential benefits and integration of the new acquisition into the company's existing business model.
In other recent news, Atlas Energy Solutions has announced the acquisition of Moser Acquisition, a distributed power solutions company, in a deal valued at $220 million. The purchase, anticipated to be immediately beneficial to Atlas Energy's financials, is expected to close by the end of the first quarter of 2025. This strategic move is projected to enhance Atlas Energy's offerings in the power solutions sector. Furthermore, Atlas Energy has projected a significant increase in its fourth-quarter revenue, expecting to report revenue between $270 million and $272 million.
In recent analyst activity, Atlas Energy has been downgraded from Buy to Neutral by major firms including BofA Securities, Goldman Sachs, and Citi due to concerns over the company's financial forecasts. Despite these downgrades, Atlas Energy maintains strong fundamentals, with revenue reaching $925.76M and year-over-year growth of 48.67%. These downgrades come amidst a challenging start to the year for short sellers in the energy sector, with significant mark-to-market losses.
Atlas Energy also reported a 6% quarterly increase in revenue, reaching $304 million, and announced a dividend increase to $0.24 per share and a $200 million share repurchase program, indicating confidence in its financial health. These are the recent developments for Atlas Energy Solutions.
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