Ameresco, Inc. (AMRC): what the price requires

At today's price, Ameresco, Inc. (AMRC) is priced for +12.2% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-19 · Source: https://boothcheck.com/report/AMRC

Headline

FieldValue
TickerAMRC
CompanyAmeresco, Inc.
Current price$23.95/sh
CompositionProject revenue 77% / O&M revenue 6% / Energy assets 13% / Other 5%

What The Price Requires (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

FieldValue
Inversion basiswhole-company
Operating margin needed1.1%
Operating margin today5.4%
Margin compression implied-4.3pp
Implied growth12.2%
Multiple paid32x operating income

The operating-margin requirement is derived from the framework's value band at year 9, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 7% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~9.5pp (computed at the 7% minimum rate; the CAPM rate 6.8% sits below it).

Reconcile: at the x-ray's 9.3% required return this reads ~6.5 years; the models below use their own rates.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.23σ
cohort percentile (of 225 peers)73
sustained it ~5 years at this level50%
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

FamilyMedian price/FVModelsReads
Asset14.69x3expensive
Earnings8.68x2expensive
Relative0.56x3justifies
Growth1.10x1expensive

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=9)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$0.00—noNegative/zero FCF — equity value floored at $0
DCF Exit MultipleGrowth$0.00—noNegative/zero FCF or EBITDA — equity value floored at $0
Relative ValuationRelative$24.680.97xyesP/E 39.6x (blended: static sector reference 18x + trailing (TTM) 166x), scenarios: 32.7x / 39.6x / 46.5x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$1.5615.35xyesBV/sh $20.13, ROE (TTM) 0.7%, ke 9.3%
Two-Stage Excess ReturnAsset$0.8129.56xyes5yr excess ROE then converge to ke=9.3% (excluded from median)
Discounted Future Market CapGrowth$21.701.10xyesRev $1.8B, growth 11% (input: historical growth; tapered), Terminal P/S: 0.6x / 0.7x / 0.8x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/ERelative——no—
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$15.931.50xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.10B × (1−21%) / WACC 8.4% → EPV (no growth)
Residual IncomeAsset$0.5742.01xyesBV $20.13 + 5yr PV of (ROE (TTM) 0.7% − Kₑ 9.3%) × BV; BV grows 0.5%/yr (excluded from median)
Graham NumberAsset$7.963.01xyes√(22.5 × EPS $0.14 × BVPS $20.13) — Graham's conservative floor
EV/EBITDA RelativeRelative$43.020.56xyesEBITDA $0.20B × sector EV/EBITDA 12.0x
FCF YieldEarnings——no—
SBC-Adj FCF YieldEarnings——no—
Ben Graham FormulaEarnings$0.12199.54xyesEPS $0.14 × (8.5 + 2×-5.0%) × (4.4 / 5.3%) (excluded from median)
ROIC-Justified P/BAsset$1.6314.69xyesBV $20.13 × (ROIC 0.7% / WACC 8.4%)
P/Sales SectorRelative$82.850.29xyesRevenue $1.75B × sector P/S 2.5x
PEG Fair ValueRelative——no—
Earnings YieldEarnings$1.5115.86xyesEPS $0.14 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$1.7b
Net debt / NOPAT (after-tax)23.15x
Net debt / operating income (pre-tax)18.29x
Share count CAGR (buyback)-0.4%
Burning cashyes

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

Bull Case

Start with what the market is paying for, because the price is making a growth bet the backlog actually supports. At roughly 31 times operating income, the price embeds operating growth around 14% a year, and the question is whether the pipeline justifies it. The filing carries the answer in contracted form: Ameresco reports billions in "expected future revenues under signed customer contracts for the installation or construction of projects, which we sometimes refer to as fully-contracted backlog," on top of awarded work not yet under signed contract. Awarded project backlog grew 20% to $2.8 billion with total backlog reaching $5.3 billion. A double-digit growth assumption is far more credible when the revenue is already signed or awarded than when it depends on winning business that does not yet exist.

The owned-asset strategy is the part that turns a contractor into a compounder. Beyond building projects for customers, Ameresco constructs and keeps renewable plants of its own, entering "construction and term loan agreements for the purpose of constructing and owning certain renewable energy plants," then collecting long-term contracted revenue from them. Each megawatt placed into service adds a stream of recurring, contracted cash flow that outlasts any single construction project, and management is guiding 100 to 120 megawatts into service this year against capital spending of $300 to $350 million. The contractor revenue funds the lights; the energy assets build the annuity underneath.

The demand backdrop is structural and policy-reinforced. Ameresco sells customers a way to "reduce its energy costs", which is a value proposition that holds whether the driver is decarbonization mandates, rising power prices, or simple payback economics. The recent $400 million joint venture with HASI to launch Neogenix Fuels, in which Ameresco holds 70% and expects roughly $100 million of direct cash proceeds for strategic initiatives, working capital, and debt reduction, shows the company adding capacity while pulling in outside capital to share the funding load. Bringing a partner into the asset build is exactly how a capital-hungry developer grows without carrying every dollar of the cost alone.

Bear Case

The capital-allocation question is the heart of the bear case, because Ameresco's growth is funded by debt and the math is demanding. Gross debt sits near $1.8 billion against trailing operating income of about $94 million, and the company is spending more cash than it generates as it builds owned energy assets. Much of that debt is project-level, taken on to construct specific plants, with the filing noting the "physical assets and the operating agree"ments behind each financing, so it is not all corporate recourse leverage. But the strategy still requires Ameresco to keep raising and deploying capital faster than the assets pay it back, and a developer that must continually fund construction is exposed precisely when credit tightens or interest costs rise. The capital that builds the next plant is the same capital that services the last one.

The second governance concern is how dependent the equity is on the gap between today's slim earnings and the growth the price assumes. Current operating margin runs around 5%, and the price requires roughly 14% annual operating growth to persist for years. That places enormous weight on backlog converting to revenue on schedule, and the filing is candid that the company "may not recognize all revenues from our backlog or receive all payments anticipated unde"r its contracts. Awarded backlog is not signed backlog, and even signed projects can slip on permitting, interconnection, or customer financing. When the equity value rests on converting a $5.3 billion pipeline at a double-digit pace, any sustained slowdown in that conversion hits the growth assumption directly.

The policy and rate sensitivity sits underneath both. The economics of energy efficiency and renewable projects lean on tax incentives and a supportive policy environment, and the owned-asset model leans on financing costs staying manageable across long contract lives. The asset-value and earnings-power lenses both read the price as expensive, which is the signal that little of the current valuation is supported by what the company earns or owns today; it is almost entirely a forward bet. A bear does not have to argue the business is bad. It has to argue that a leveraged developer, growing through debt-funded asset construction into an uncertain policy and rate backdrop, is priced for an execution path with very little room to disappoint.

Valuation

At the current price the market pays about 31 times company-wide operating income, which inverts to roughly 14% operating growth a year for five years. Against Ameresco's own recent record that pace is within what it has delivered, so the demand is less about the rate and more about its persistence, and history offers a sober reference: only about 46% of comparable fast-growers sustained that pace for even five years. The growth assumption is plausible, supported by a backlog that is partly contracted, but it is not a low bar, and the price leaves little margin if conversion slows.

The methods we use to triangulate split sharply, and the split defines the bet. The asset-value lens reads the price many times above what the company's net assets justify, and the earnings-power lens, capitalizing today's slim operating earnings, reads it as similarly expensive. Those two say the current business does not support the price. Only the relative-multiple and forward-growth lenses reach it, the latter by crediting the multi-year backlog conversion the inversion describes. When three of four families say expensive and only the forward-looking methods defend the level, the price is almost entirely a growth bet; there is little asset or earnings floor beneath it. That is the honest characterization of a developer priced on its pipeline rather than its trailing results.

Solvency is where this report has to be most careful, and it belongs in the close. Reported gross debt near $1.8 billion looks alarming against operating income, but a large share is project-level financing secured by the specific energy plants it built, with the contracted cash flows from those assets servicing the loans rather than the parent's general earnings, so the headline leverage ratio overstates the corporate recourse risk. What remains true is that the company is burning cash to build, and the strategy depends on continuous access to capital. The HASI joint venture, bringing in outside funding and an expected $100 million of cash proceeds partly earmarked for debt reduction, is the kind of move that eases that pressure. The decisive fact is not the growth rate the price needs; it is that the entire valuation rests on a forward pipeline, funded by debt, with almost no support from what Ameresco currently earns or owns.

Catalysts

The first-quarter 2026 print showed the growth and the cost of it side by side. Revenue rose 14% year over year to $401.5 million on strong project execution and backlog growth, while the company posted a net loss of $18.3 million, GAAP EPS of negative $0.35, and adjusted EBITDA of $40.5 million. The backlog was the standout: awarded project backlog grew 20% to $2.8 billion and total project backlog reached $5.3 billion, the leading indicator that the double-digit revenue growth the price assumes has a pipeline behind it.

The forward catalysts are the 2026 plan and the capital moves around it. Management guided full-year revenue to $2.0 to $2.2 billion, with capital spending of $300 to $350 million and 100 to 120 megawatts of energy assets to be placed into service, and pointed to second-quarter adjusted EBITDA of $58 to $62 million. The $400 million Neogenix Fuels joint venture with HASI, in which Ameresco holds 70% and expects about $100 million of direct cash proceeds for strategic initiatives, working capital, and debt reduction, is the most consequential strategic development for the funding picture. The sell side is split, with one firm raising its target to $59 on a Buy and another trimming to $36 while keeping an Outperform, a divergence that captures the bull-bear tension precisely. The watch list is backlog conversion to revenue, megawatts placed into service on schedule, and the trajectory of debt as the asset base scales.

Peer Cohorts (Per Segment, With Filing Citations)

North America Regions (reported)

U.S. Federal (reported)

Renewable Fuels (reported)

Methodology Note

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Ameresco Q1 2026 results, 8-K · Ameresco Q1 2026 guidance, 8-K · analyst notes, 2026

View the full interactive AMRC report on boothcheck