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On Tuesday, Piper Sandler analyst Kashy Harrison revised the price target for Ameresco (NYSE:AMRC) shares, setting it at $21, down from the previous $30, while maintaining an Overweight rating on the stock. Currently trading at $14.10, the stock sits well below its 52-week high of $39.68, having declined over 63% in the past six months. Harrison’s assessment followed Ameresco’s performance, which showcased a strong start to the year 2025, with the company beating EBITDA expectations by 14% due to higher revenues. This increase was attributed to better execution within the Projects segment. According to InvestingPro data, the company maintains a "Fair" overall financial health score, with 13 additional key insights available to subscribers.
Ameresco reported a 22% year-over-year growth in its total project backlog, reaching a record $4.90 billion, bolstered by strong bookings that were 1.3 times the revenue. The company’s revenue growth reached 28.76% in the last twelve months, though InvestingPro analysis indicates the company is currently burning through cash rapidly with a negative free cash flow yield. The company’s solid bookings and backlog growth did not lead to changes in its financial guidance, but it was noted that Ameresco is off to a positive start for the year.
The company also provided more clarity on its exposure to GSA Federal contracts, which represent 10% of the total backlog. Ameresco reassured stakeholders by indicating that a project previously canceled by DOGE has been re-scoped and that other projects which had been paused are now back in motion. Despite a reduction in the federal workforce, Ameresco has not seen any negative effects on project development, a reassuring sign considering the guidance buffer in place.
On the topic of tariffs, Ameresco signaled that the impact for 2025 would be minimal as most equipment was already on-site and that it expects to pass future costs onto customers. Harrison concluded that the stock should respond well to the diminished uncertainty surrounding the DOGE project. With this updated price target, Piper Sandler reflects a more cautious valuation while still recognizing Ameresco’s robust start to the year.
In other recent news, Ameresco reported its first-quarter 2025 earnings, which surpassed expectations. The company posted a narrower-than-expected loss with an EPS of -$0.11, beating the forecast of -$0.16. Revenue also exceeded predictions, reaching $352.8 million compared to the anticipated $333.33 million, marking an 18% year-over-year increase. This strong performance was driven by significant growth in Ameresco’s projects business and energy asset revenue. Jefferies analyst Julian Dumoulin-Smith responded to these results by raising the price target for Ameresco shares to $11.00 from $10.00, while maintaining a Hold rating. The analyst noted that Ameresco’s federal projects, which had been paused, are now resuming, providing a positive outlook for future engagements. Additionally, Ameresco’s management reaffirmed their guidance for the full year, projecting revenue of $1.9 billion and adjusted EBITDA of $235 million. This guidance reflects the company’s confidence in continued growth for the remainder of 2025.
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