Ameresco (AMRC): Exploring the Current Valuation After a Week of Renewed Share Price Momentum

Ameresco (AMRC) shares have gained 1% over the past day and are up nearly 7% for the week. Investors may be watching the stock after its recent month of volatility, looking for cues about its direction ahead.

See our latest analysis for Ameresco.

Ameresco’s 90-day share price return of 37.3% shows how quickly momentum can build following recent volatility. Its 1-year total shareholder return stands at 21.7%. Short-term swings hint at renewed optimism, but the longer view reminds us just how much ground there is to recover from past declines.

If recent volatility has you rethinking your portfolio, now is a great chance to widen your perspective and discover fast growing stocks with high insider ownership

With shares still trading nearly 20% below consensus analyst targets and at a significant discount compared to estimated intrinsic value, is Ameresco offering a hidden bargain or are investors already factoring in all of its future growth potential?

Most Popular Narrative: 16.6% Undervalued

The widely followed narrative values Ameresco significantly above its recent closing price, suggesting the market may be underestimating its long-term earnings power. The stage is set for a story of growth fueled by federal projects and technological innovation.

Sharply rising utility rates and escalating grid instability are prompting more public and private clients to pursue long-term energy infrastructure, distributed generation, and microgrid projects. These are areas where Ameresco's project backlog and pipeline are rapidly growing, indicating upside for future revenues and gross margins as these higher-value projects convert.

Read the complete narrative.

Want to pull back the curtain on this bold fair value estimate? The narrative hints at aggressive expansion, ambitious profit targets, and a power move into markets many overlook. But what exactly is fueling analysts’ optimism about future revenue and margins? Some of the key assumptions might make you do a double-take. Dive in to uncover what’s really driving the valuation story.

Result: Fair Value of $41.89 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, shifting government funding priorities or prolonged supply chain challenges could quickly change the trajectory for Ameresco, which may make near-term outlooks more uncertain.

Find out about the key risks to this Ameresco narrative.

Another View: Discounted Cash Flow Perspective

While many investors rely on earnings multiples to gauge value, our DCF model provides a different lens. Based on future cash flow projections, the SWS DCF model puts Ameresco's fair value much higher at $83.84. This suggests the stock could be deeply undervalued. But which story should investors believe—the multiples or the long-term cash flow outlook?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own Ameresco Narrative

If the analysis so far doesn’t match your view, or you want to dive deeper into the numbers yourself, you can build your own narrative with just a few clicks: Do it your way

A great starting point for your Ameresco research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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