HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. (HASI): what the price requires

The current priced-in claim for HA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. (HASI) is temporarily suppressed because the live engine record is unavailable. The dated report remains a snapshot, not a current market read.

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

Headline

FieldValue
TickerHASI
CompanyHA SUSTAINABLE INFRASTRUCTURE CAPITAL, INC.
Current price$37.66/sh

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed178.7%
Operating margin today57.3%
Margin expansion implied+121.4pp
Multiple paid4x operating income

The operating-margin requirement is derived from the framework's value band at year 5, a separately labeled basis from the headline growth/duration solve.

The price sits below what even a 5%/yr operating-profit decline would warrant; the inversion reports a bound, not a solved growth path.

Solve inputs: computed at a 12.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range

ReferenceValue
vs own history-1.85σ
cohort percentile (of 82 peers)0
implied end-window share0%

Valuation X-Ray

Every valuation family lands below the price. The price therefore requires assumptions beyond what those standard frames encode.

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
Asset10.92x4expensive
Earnings2.61x4expensive
Relative2.60x4expensive
Growth1.39x5expensive

Families that call it expensive: Asset, Earnings, Relative

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

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$27.151.39xyesFCF base $0.2B, growth 14% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection
DCF Exit MultipleGrowth$27.171.39xyesExit EV/EBITDA: 26144.4x / 26146.4x / 26148.4x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelative$13.092.88xyesP/E 50.25x (blended: static sector reference 35x + trailing (TTM) 86x), scenarios: 41.2x / 50.3x / 59.3x (bear / base = reference held flat / bull), EV/EBITDA 44x
Simple DDMGrowth$26.191.44xyesDPS $1.78, g=2.3% (sustainable: ROE (TTM) × retention; not the terminal-growth assumption), ke=9.3%
Two-Stage DDMGrowth$63.170.60xyesStage 1: 20% for 5yr, Stage 2: 3.5% perpetual
Simple Excess ReturnAsset$4.747.95xyesBV/sh $19.15, ROE (TTM) 2.3%, ke 9.3%
Two-Stage Excess ReturnAsset$2.7113.90xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$20.711.82xyesRev $0.4B, growth 14% (input: historical growth; tapered), Terminal P/S: 9.2x / 11.2x / 13.2x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$14.002.69xyesEPS $0.40, growth 35% (input: historical EPS growth), PEG=2.45 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings——no—
Residual IncomeAsset$1.9819.02xyesBV $19.15 + 5yr PV of (ROE (TTM) 2.3% − Kₑ 9.3%) × BV; BV grows 1.5%/yr
Graham NumberAsset$13.132.87xyes√(22.5 × EPS $0.40 × BVPS $19.15) — Graham's conservative floor
EV/EBITDA RelativeRelative$1.0037.66xyesEBITDA $0.00B × sector EV/EBITDA 20.0x (excluded from median)
FCF YieldEarnings$19.621.92xyesFCF $220.1M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$16.412.29xyesSBC-adj FCF $0.18B (FCF $0.22B − SBC $0.04B) capitalized at Kₑ
Ben Graham FormulaEarnings$12.912.92xyesEPS $0.40 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset——no—
P/Sales SectorRelative$20.121.87xyesRevenue $0.43B × sector P/S 6.0x
PEG Fair ValueRelative$15.002.51xyesEPS $0.40 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x
Earnings YieldEarnings$4.328.72xyesEPS $0.40 / 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$3.3b
Net debt / NOPAT (after-tax)17.54x
Net debt / operating income (pre-tax)13.86x
Interest coverage0.7x
Share count CAGR (dilution)9.4%
Burning cashno

Bullet Takeaways

Bull Case

The moat here is a hard-won origination engine wrapped around relationships most competitors cannot replicate. HASI does not chase one-off deals; it embeds itself with the people who build climate infrastructure. The 10-K describes partnering with project "owners and operators, utilities, and energy service companies, which provide recurring, programmatic investment and fee-generating opportunities, while also enabling scale benefits." Programmatic relationships mean a steady, repeatable flow of investments rather than a constant scramble for the next deal, which is the difference between a financier with an edge and one taking whatever the market offers. That flow let the company close more than $600 million of transactions in the first quarter alone, at new asset yields above 10.5%.

The economics of that engine are genuinely attractive when read on the right basis. As a specialty financier, HASI earns from four sources the 10-K lists plainly: "(1) interest income, (2) income from equity method investments, (3) gains on the sale of assets through securitizations, (4) fee reven[ue]." The blend produces an adjusted return on equity of about 15.7% and adjusted recurring net investment income of $101 million in the quarter, up 29% year over year. A business putting new money to work above 10.5% while earning a mid-teens return on equity is generating a real spread over its cost of capital, and that spread is the engine of book-value and earnings growth.

The forward plan is specific and self-funding in its ambition. Management affirmed 2028 guidance for adjusted earnings per share of $3.50 to $3.60 and an adjusted return on equity of at least 17%, while targeting a reduction in the dividend payout ratio to below 50% of adjusted earnings by 2028. Retaining more earnings to fund growth, rather than paying it all out, is how a financier compounds book value internally and reduces its dependence on issuing new stock. The bull case is a relationship-driven climate financier earning a wide spread, growing investment income at a near-30% pace, with a clear plan to fund itself more from retained earnings over time.

Bear Case

The bear case is structural and lives on the balance sheet: HASI is a leveraged financier, and leveraged financiers are fragile in exactly the conditions that matter most for clean energy. The 10-K discloses $5.1 billion of debt that is fixed-rate or hedged, which protects against rate moves on existing borrowings, but the model still depends on continuous access to capital markets to fund new investments and to refinance maturities. The share count grew more than 9% over the past year, which is how the company has funded much of its growth: by issuing equity. When the stock is high, that is accretive; when it falls, raising equity dilutes existing holders at a bad price, and the growth engine that depends on fresh capital sputters. A specialty lender's worst scenario is needing capital precisely when capital is expensive, and a levered balance sheet removes the cushion to wait it out.

The second pressure is the one the whole sector shares: the economics of climate infrastructure depend on government policy, and policy can change. The 10-K is candid that "a change in the fiscal health, level of appropriations or budgets of U.S. federal, state and local governments could reduce demand for our investments." Tax credits, subsidies, and renewable mandates underpin the returns on many of the projects HASI finances, and a shift in the political environment toward less support for clean energy would slow origination and could pressure the value of the existing portfolio. That is a risk no amount of hedging addresses, and it is part of why the market assigns the stock a discounted valuation despite the strong reported returns.

Competition and credit risk round out the case. The 10-K warns that an increase in "the number or the size of our competitors in this market has resulted, and could continue to result, in less attractive terms on our in[vestments]," which compresses the very spread the bull case rests on. And as a lender, HASI bears the risk that projects underperform or borrowers default, a risk that does not show up in a good year and shows up all at once in a bad one. The standard operating-income coverage math reads poorly here because most of the company's earnings sit below the operating line in interest and equity-method income, but the underlying point holds: this is a spread business levered on a sector whose economics depend on rates staying manageable and policy staying supportive. The bear case is that the price reflects those risks because they are real, not because the market is mispricing a safe compounder.

Valuation

HASI is a specialty financier, and the standard operating-income lens does not fit it. The engine reads the price at a low multiple of operating income while every method flags it as rich, but that contradiction is an artifact of the model: most of HASI's earnings, interest income, equity-method income, gains on securitizations, and fees, sit below the operating line, so an operating-income multiple both understates the earnings and distorts the coverage math. The honest way to value HASI is the way its own disclosures frame it, on adjusted earnings and return on equity, the analogs a financier and a REIT use instead of a margin.

On that basis the picture is clearer. The stock at roughly $39 against management's 2028 adjusted-earnings target of $3.50 to $3.60 implies a low-double-digit forward multiple of adjusted earnings, modest for a business reporting a 15.7% adjusted return on equity and growing recurring investment income near 30%. The market is not paying a growth premium here; it is applying a discount, and the discount reflects the two risks that govern the model: leverage and the policy-and-rate sensitivity of clean-energy economics. The peer comparison the engine offers, a set of conventional property REITs, is the wrong cohort; the right frame is other specialty and infrastructure financiers, against which HASI's reported return on equity is competitive but its policy exposure is higher.

Solvency is where the caution belongs, read on a finance-company basis rather than a coverage ratio. HASI carries $5.1 billion of fixed or hedged debt and funds growth partly through equity issuance, with the share count up more than 9% in a year. The dividend-payout reduction targeted for 2028 is the mechanism to fund more growth internally and lean less on capital markets, which would strengthen the balance sheet if achieved. A buyer at this price is underwriting a leveraged climate financier to keep earning a wide spread and a mid-teens return on equity while it grows into a self-funding model, accepting that the discount in the valuation is the market's price for the rate and policy risks that a spread business in this sector cannot escape. The reported returns are strong; the price is the market holding money back against the structural fragility, not a clean bargain.

Catalysts

HASI's first quarter of 2026 beat on its adjusted measures. Adjusted earnings per share rose 20% to $0.77, adjusted recurring net investment income grew 29% to $101 million, and adjusted return on equity reached 15.7%, while the company closed more than $600 million of transactions at new asset yields above 10.5%. The combination of strong origination yields and growing investment income is the core of the operating story.

The multi-year targets are the catalysts that frame the thesis. Management affirmed 2028 guidance for adjusted earnings per share of $3.50 to $3.60 and an adjusted return on equity of at least 17%, and reiterated targets to cut the dividend payout ratio below 50% of adjusted earnings by 2028 and below 40% by 2030. Progress toward the lower payout ratio is the signal that the company is moving toward funding its growth more from retained earnings, which would reduce its reliance on equity issuance, so the payout trajectory is worth tracking each quarter.

The variables that move the fundamental story are interest rates, which set the cost of the debt that funds new investments and the attractiveness of the spread, the federal and state policy environment for clean-energy incentives that underpins project economics, and the pace and yield of new originations against competitive pressure on terms. The next quarterly report will show whether origination yields hold above 10.5% and whether investment income keeps compounding toward the 2028 targets the valuation is being measured against.

Peer Cohorts (Per Segment, With Filing Citations)

HA Sustainable Infrastructure Capital (consolidated) (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

HASI Q1 2026 results

View the full interactive HASI report on boothcheck