Assessing Hannon Armstrong Sustainable Infrastructure Capital (HASI) Valuation After Recent Share Price Uptick

HA Sustainable Infrastructure Capital (HASI) has shown some interesting shifts recently, with shares inching up about 2% over the past day, even as performance over the past month has been softer. Investors might wonder what is driving sentiment, especially with these mixed short- and longer-term trends.

See our latest analysis for HA Sustainable Infrastructure Capital.

Momentum in HA Sustainable Infrastructure Capital has been mixed lately, with a 10% share price return over the past 90 days but a 1-year total shareholder return of -16.5%. That recent uptick suggests investors could be seeing fresh growth potential or shifting risk perceptions.

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With shares still trading at a double-digit discount to analyst price targets and fundamentals showing solid growth, does HA Sustainable Infrastructure Capital present a compelling entry point, or is the market already pricing in that momentum?

Price-to-Earnings of 17.1x: Is it justified?

With HA Sustainable Infrastructure Capital closing at $28.13 and sporting a price-to-earnings ratio (P/E) of 17.1x, the market currently values the company higher than the average P/E for its sector peers.

The price-to-earnings multiple gauges how much investors are willing to pay for each dollar of the company's earnings. In the diversified financial sector, this metric helps benchmark valuation against profitability and industry averages.

HA Sustainable Infrastructure Capital's P/E is above the US Diversified Financial industry average of 15.1x, suggesting investors expect stronger growth or stability than the typical sector peer. However, compared to the peer average P/E of 45.8x, it still trades at a relative discount within its competitive set. The estimated fair P/E for the company, based on fundamental analysis, is 14.1x, pointing to some premium built in, but perhaps a level the market could move toward if growth or risk expectations change.

Explore the SWS fair ratio for HA Sustainable Infrastructure Capital

Result: Price-to-Earnings of 17.1x (OVERVALUED)

However, sustained underperformance over one and five years, along with recent negative momentum, could weigh on investor confidence if fundamentals do not improve.

Find out about the key risks to this HA Sustainable Infrastructure Capital narrative.

Another View: DCF Model Signals Undervaluation

While the price-to-earnings ratio suggests HA Sustainable Infrastructure Capital is trading at a premium, our SWS DCF model comes to a different conclusion. It calculates a fair value of $32.47 per share, about 13% above the current price. This indicates undervaluation from a cash flow perspective. Which lens will the market trust as momentum builds?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out HA Sustainable Infrastructure Capital for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 843 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own HA Sustainable Infrastructure Capital Narrative

If these conclusions don't quite fit your outlook or you'd rather dig into the data yourself, you can build a customized view in just a few minutes. Do it your way

A great starting point for your HA Sustainable Infrastructure Capital research is our analysis highlighting 3 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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