HA Sustainable Infrastructure Capital Surges 13.9% Amid Strategic Move Toward New Energy Financing

• Wondering if HA Sustainable Infrastructure Capital is a smart buy right now? You are definitely not alone. Figuring out if it is undervalued or riding too high can make all the difference for investors.
• In the last week, the stock price surged 13.9% and it is up 18.0% year-to-date, signaling a burst of momentum and perhaps a shift in how the market views its potential or risk.
• Recently, headlines have spotlighted the company’s pivot toward financing new energy projects and its expansion into sustainable markets, both of which caught investors’ attention. Such strategic moves often ripple into share prices as expectations and optimism build.
• The company currently boasts a valuation score of 4 out of 6, suggesting it could be undervalued in several key ways. Next, we will unpack how analysts typically value stocks like this, but stick around until the end. There is an even better way to understand what this score means for you.

HA Sustainable Infrastructure Capital delivered 16.4% returns over the last year. See how this stacks up to the rest of the Diversified Financial industry.

Approach 1: HA Sustainable Infrastructure Capital Excess Returns Analysis

The Excess Returns model evaluates a company's ability to generate returns on its invested capital above the minimum required by its investors, known as the cost of equity. This approach offers valuable insight by estimating the added value generated for shareholders based on sustainable profitability and projected growth in book value per share.

For HA Sustainable Infrastructure Capital, the Excess Returns analysis shows:

• Book Value: $20.74 per share
• Stable Earnings Per Share (EPS): $3.14 per share (sourced from future Return on Equity estimates by 6 analysts)
• Cost of Equity: $2.18 per share
• Excess Return: $0.95 per share
• Average Return on Equity: 14.23%
• Stable Book Value Projection: $22.04 per share (from 5 analyst estimates)

By incorporating these figures, the model calculates an intrinsic value that is 11.9% higher than the current share price. This indicates the stock is currently undervalued relative to its long-term ability to generate returns above its required cost of equity. In light of this material discount, the Excess Returns model suggests HA Sustainable Infrastructure Capital may offer investors an attractive opportunity at current prices.

Result: UNDERVALUED

Our Excess Returns analysis suggests HA Sustainable Infrastructure Capital is undervalued by 11.9%. Track this in your watchlist or portfolio, or discover 884 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for HA Sustainable Infrastructure Capital.

Approach 2: HA Sustainable Infrastructure Capital Price vs Earnings

The Price-to-Earnings (PE) ratio is a widely accepted valuation tool for companies like HA Sustainable Infrastructure Capital that generate consistent profits. This multiple allows investors to weigh what the market is willing to pay today for a dollar of the company's earnings. It is especially useful for profitable businesses because it reflects both investor sentiment and real-world earnings power.

Growth expectations and company-specific risks play a major role in determining whether a stock’s PE ratio is high, low, or just right. Fast-growing companies or those perceived as less risky typically command higher PE ratios, while slower growth or higher risk often brings that multiple down.

Currently, HA Sustainable Infrastructure Capital trades at a PE ratio of 13.2x. For context, this is almost exactly in line with the Diversified Financial industry’s average of 13.1x, and is well below the average for peers at 47.1x. However, raw comparisons to industry averages or peers can be misleading, as they might not reflect this company’s specific strengths, risks, or growth prospects.

This is where Simply Wall St's “Fair Ratio” comes in. The Fair Ratio (13.3x for HA Sustainable Infrastructure Capital) predicts what a reasonable PE would be, factoring in not just growth outlook, but also industry dynamics, profit margins, risk, and the company's size. This tailored approach provides a fairer yardstick than basic averages and puts more weight on the most relevant details for this business.

With HA Sustainable Infrastructure Capital’s actual PE of 13.2x almost matching the Fair Ratio of 13.3x, the evidence suggests that the stock is currently priced about right based on its earnings and other key fundamentals.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1404 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your HA Sustainable Infrastructure Capital Narrative

Earlier, we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative connects your unique view of a company, like HA Sustainable Infrastructure Capital, to the numbers by linking its story—your perspective about its future revenue, earnings, and margins—to a specific financial forecast and a fair value.

With Narratives, you are not just looking at raw numbers. You are building a concrete scenario that reflects your belief about the company's path. This approach is straightforward and accessible to anyone, and it is available on Simply Wall St's Community page, used by millions of investors to share and discover different takes.

Narratives help you decide when to buy or sell by revealing how your fair value stacks up against the current share price. In addition, they stay up to date as the platform automatically updates key forecasts when new news or earnings reports are released.

For example, with HA Sustainable Infrastructure Capital, one investor’s Narrative might forecast rapid growth and arrive at a high fair value. Another investor who is more cautious might predict slower earnings and a much lower fair value.

Do you think there's more to the story for HA Sustainable Infrastructure Capital? Head over to our Community to see what others are saying!

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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