Infrastructure and Energy Alternatives, Inc.

NasdaqCM:IEA Stock Report

Market Cap: US$667.0m

This company has been acquired

The company may no longer be operating, as it has been acquired. Find out why through their latest events.

Infrastructure and Energy Alternatives Future Growth

Future criteria checks 5/6

Key information

70.0%

Earnings growth rate

51.02%

EPS growth rate

Construction earnings growth24.5%
Revenue growth rate7.8%
Future return on equity38.63%
Analyst coverage

Low

Last updatedn/a

Recent future growth updates

Recent updates

Seeking Alpha • Jul 26

MasTec Acquires IEA: Turnaround Possible, But Not Right Now

Both MasTec and IEA are diversified engineering, procurement, and construction companies. However, IEA significantly increases MasTec’s exposure to renewable energy projects. Thanks to IEA, MasTec will gain some issues with profitability, but as I have discussed before, I believe IEA is set for a turnaround. Will it be worth holding on to MTZ shares? Introduction to Renewed Thesis I am a shareholder of Infrastructure and Energy Alternatives (IEA), and have written an article discussing how current profit weakness is an opportunity for value expansion upon improvement. Well, it seems that I am not the only one looking for a turnaround play, as another EPC MasTec (MTZ) has acquired IEA. The current 30% premium, or 50% above my prior article, is certainly a strong return, and came far sooner than expected. However, the share price has been weak for at least a year and a half, as the current buyout price is only a mild premium over my first coverage of IEA. I am thankful that I have recently added more shares on the weakness, an important way to trade cyclical companies. The questions now are: to sell IEA prior to the completion of the acquisition, or to hold on to the coming MasTec shares. It is an interesting thought experiment, and I see a few pros and cons to both sides of the coin. Unfortunately, MasTec does not have a strong balance sheet, and this acquisition is both draining all cash on hand, and is dilutive ($14 total share price, $10.50 funded in cash and $3.50 in shares/dilution). At the same time, we remain in a weak cycle for EPCs, especially as the effects of the infrastructure bill remain unseen. If investor sentiment changes over the next few quarters thanks to out-performance, MasTec’s similarly low valuation allows for shares to gain at a rapid clip. MasTec Acquisition Presentation MasTec’s new pro forma outlook has been presented, shown in the image below, and I believe that the new company will gain necessary diversification. MTZ has traditionally relied on communications and power delivery revenues, while IEA has seen far more growth from renewable energy projects. Now, the company will have more growth segments to rely on even if governmental negligence prevents full stimulus (while one bill has been passed, effects have yet to be seen but renewable projects may be at the fore). I believe that stimulus will be necessary to allow for a bullish outlook on MasTec due to financial weakness. MasTec The acquisition exacerbates two major issues: debt and profitability. IEA is known as having profitability issues, even as revenue growth has averaged over 50% per year for multiple years. Meanwhile, MasTec has tried hard to maintain positive net income, but this has come with debt and at the expense of growth. It is difficult to expect that current profitability will be maintained, and so, investors may sell-off as the company attempts to consolidate the joint businesses. While this may lead to an opportunity later on, the shares may be weak in the intermediate term. As you can see in the two charts below, management will have a lot of work to do to find synergies and increase profit margins. Perhaps economies of scale, internal supplier/client relationships, and other catalysts will allow for improvement. Unfortunately, more stimulus/favorable contracts will be necessary. Koyfin Koyfin Moving to balance sheet issues, we can see that MasTec is already significantly levered. Now, IEA will be adding a further $400 million in debt to the combined company, a total over $2.5 billion. The deal will also be dilutive, so look for MasTec’s share count to increase. Lastly, IEA’s current losses are greater than MTZ’s current FCF, so it is unknown whether the balance sheet will be improved moving forward. This uncertainty further lowers investor sentiment, and in turn, share price. This is why the MTZ is already down 6% after the announcement, and selling may continue. Koyfin Koyfin One of the few positives I can see is the cheap acquisition price, and the continued opportunity for the value to rise. While reliant on both companies seeing increases in profitability, the opportunity arises thanks to fiscal stimulus. Further, IEA has access to the important clean energy industry that remains in a secular growth cycle. As MasTec’s valuation reaches all-time lows, one should expect this poor cycle to end, and a positive one to begin. While leverage will continue to hamper the EV/EBITDA value, the P/S indicates that any changes in profitability has the ability to quickly bring the value above 1.0x. This would account for over 60% return, and may occur within a few years based on current guidance. However, in the short-term, I would wait for the valuation to continue falling, and prices below 0.5x P/S are historically better times to buy MTZ.
Seeking Alpha • Jun 28

Long IEA, Short REI: Renewable Energy Vs. Fossil Fuels, A Showdown

The most important, and economically viable, pair trade in the market is: short fossil fuels - long renewables. Yes, yes, please hear me out. Before you click away, I will address dilemmas and hindrances to my thesis, including governmental inefficiency, wasteful spending, and risky investment strategies. For this reason, I provide multiple hedges on both sides of the aisle in order to perform proper risk management. I do not look to persuade you into choosing one or the other, I am merely sharing my own ideology on the matter.
Analysis Article • Nov 25

Should You Think About Buying Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA) Now?

Infrastructure and Energy Alternatives, Inc. ( NASDAQ:IEA ), is not the largest company out there, but it received a...
Analysis Article • May 07

Infrastructure and Energy Alternatives, Inc.'s (NASDAQ:IEA) CEO Compensation Is Looking A Bit Stretched At The Moment

Under the guidance of CEO JP Roehm, Infrastructure and Energy Alternatives, Inc. ( NASDAQ:IEA ) has performed...
Analysis Article • May 05

Estimating The Fair Value Of Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA)

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Infrastructure and...
Analysis Article • Apr 15

Infrastructure and Energy Alternatives, Inc.'s (NASDAQ:IEA) Has Found A Path To Profitability

With the business potentially at an important milestone, we thought we'd take a closer look at Infrastructure and...
Analysis Article • Mar 04

Should You Investigate Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA) At US$15.63?

Infrastructure and Energy Alternatives, Inc. ( NASDAQ:IEA ), is not the largest company out there, but it received a...
Analysis Article • Jan 28

What Percentage Of Infrastructure and Energy Alternatives, Inc. (NASDAQ:IEA) Shares Do Insiders Own?

The big shareholder groups in Infrastructure and Energy Alternatives, Inc. ( NASDAQ:IEA ) have power over the company...
Analysis Article • Jan 02

The Infrastructure and Energy Alternatives (NASDAQ:IEA) Share Price Is Up 383% And Shareholders Are Delighted

While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great...
Analysis Article • Dec 07

Are Infrastructure and Energy Alternatives's (NASDAQ:IEA) Statutory Earnings A Good Reflection Of Its Earnings Potential?

Broadly speaking, profitable businesses are less risky than unprofitable ones. Having said that, sometimes statutory...

Earnings and Revenue Growth Forecasts

NasdaqCM:IEA - Analysts future estimates and past financials data (USD Millions)
DateRevenueEarningsFree Cash FlowCash from OpAvg. No. Analysts
12/31/20242,75292471221
12/31/20232,60962351062
12/31/20222,37750-7632
6/30/20222,283-78-103-79N/A
3/31/20222,162-91-67-36N/A
12/31/20212,078-85-41-11N/A
9/30/20211,926-11991118N/A
6/30/20211,751-1192111N/A
3/31/20211,671-96778N/A
12/31/20201,753-24858N/A
9/30/20201,881106976N/A
6/30/20201,781106876N/A
3/31/20201,628-93643N/A
12/31/20191,460-207380N/A
9/30/20191,216-66-47-40N/A
6/30/20191,073-68-49-42N/A
3/31/2019919-50-11-5N/A
12/31/2018779-444347N/A
9/30/2018622-51820N/A
6/30/2018521-13134N/A
3/31/2018453-23133N/A
12/31/201745517-11-9N/A
9/30/2017523513538N/A
12/31/2016603645154N/A
12/31/2015205-9N/A-6N/A

Analyst Future Growth Forecasts

Earnings vs Savings Rate: IEA is forecast to become profitable over the next 3 years, which is considered faster growth than the savings rate (1.9%).

Earnings vs Market: IEA is forecast to become profitable over the next 3 years, which is considered above average market growth.

High Growth Earnings: IEA is expected to become profitable in the next 3 years.

Revenue vs Market: IEA's revenue (7.8% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: IEA's revenue (7.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: IEA's Return on Equity is forecast to be high in 3 years time (38.6%)

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2022/10/07 12:45
End of Day Share Price 2022/10/06 00:00
Earnings2022/06/30
Annual Earnings2021/12/31

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* Example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on Github.

Analyst Sources

Infrastructure and Energy Alternatives, Inc. is covered by 5 analysts. 2 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Brent ThielmanD.A. Davidson & Co.
Shahriar PourrezaGuggenheim Securities, LLC
Paul PenneyNorthland Capital Markets