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Atlantica Sustainable Infrastructure plcNasdaqGS:AY Stock Report

Market Cap US$2.6b
Share Price
n/a
US$22
n/aintrinsic discount
1Y3.5%
7D0.09%
1D
Portfolio Value
​
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Atlantica Sustainable Infrastructure plc

NasdaqGS:AY Stock Report

Market Cap: US$2.6b

This company has been acquired

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

Atlantica Sustainable Infrastructure (AY) Stock Overview

Owns, manages, and invests in renewable energy, storage, natural gas and heat, electric transmission lines, and water assets in North America, South America, Europe, the Middle East, and Africa. More details

AY fundamental analysis
Snowflake Score
Valuation0/6
Future Growth3/6
Past Performance1/6
Financial Health1/6
Dividends2/6

Rewards

Earnings are forecast to grow 45.55% per year

Risk Analysis

Interest payments are not well covered by earnings

Large one-off items impacting financial results

Profit margins (2.5%) are lower than last year (4.5%)

Dividend of 4.05% is not well covered by earnings


AY Community Fair Values

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Atlantica Sustainable Infrastructure plc Competitors

Price History & Performance

Summary of share price highs, lows and changes for Atlantica Sustainable Infrastructure
Historical stock prices
Current Share PriceUS$21.99
52 Week HighUS$23.47
52 Week LowUS$16.82
Beta0.98
1 Month Change-0.50%
3 Month Change0.27%
1 Year Change3.53%
3 Year Change-39.80%
5 Year Change-15.52%
Change since IPO-40.57%

Recent News & Updates

Seeking Alpha • Nov 20

Atlantica Sustainable Q3: New Investors Look Elsewhere, The Deal Is Done

Summary Atlantica Sustainable Infrastructure plc's Q3 earnings showed mixed results, with a 14.4% revenue increase but a significant EPS miss due to rising operating expenses. The company faces a high debt burden, with $434M in cash against $4.8B in long-term debt, and declining efficiency metrics. The acquisition by Bidco for $22/share is nearly complete, limiting any upside for new investors and making holding shares mainly for the final dividend. The High Court of Justice of England and Wales is expected to approve the deal, making AY a private entity, by December 12th, 2024. Read the full article on Seeking Alpha
Seeking Alpha • Sep 07

Atlantica Sustainable: Some Ideas Of Where To Potentially Reinvest Capital After The Acquisition

Summary With Atlantica Sustainable Infrastructure set to be acquired, investors must decide where to reinvest their proceeds from the sale. Northland Power, Innergex Renewable Energy, and Brookfield Renewable are highlighted as attractive alternatives, offering robust project pipelines and development capabilities beyond typical YieldCos. These alternatives have lower dividend yields but possess the ability to develop and contract assets independently, capturing more value from new projects. Investors are encouraged to look beyond dividend yields and consider factors such as growth potential, diversification, and strategic positioning in the renewable energy sector. Read the full article on Seeking Alpha

Recent updates

Seeking Alpha • Nov 20

Atlantica Sustainable Q3: New Investors Look Elsewhere, The Deal Is Done

Summary Atlantica Sustainable Infrastructure plc's Q3 earnings showed mixed results, with a 14.4% revenue increase but a significant EPS miss due to rising operating expenses. The company faces a high debt burden, with $434M in cash against $4.8B in long-term debt, and declining efficiency metrics. The acquisition by Bidco for $22/share is nearly complete, limiting any upside for new investors and making holding shares mainly for the final dividend. The High Court of Justice of England and Wales is expected to approve the deal, making AY a private entity, by December 12th, 2024. Read the full article on Seeking Alpha
Seeking Alpha • Sep 07

Atlantica Sustainable: Some Ideas Of Where To Potentially Reinvest Capital After The Acquisition

Summary With Atlantica Sustainable Infrastructure set to be acquired, investors must decide where to reinvest their proceeds from the sale. Northland Power, Innergex Renewable Energy, and Brookfield Renewable are highlighted as attractive alternatives, offering robust project pipelines and development capabilities beyond typical YieldCos. These alternatives have lower dividend yields but possess the ability to develop and contract assets independently, capturing more value from new projects. Investors are encouraged to look beyond dividend yields and consider factors such as growth potential, diversification, and strategic positioning in the renewable energy sector. Read the full article on Seeking Alpha
Seeking Alpha • May 28

Atlantica Sustainable: Algonquin Dumps For A Low Price

Summary Atlantica Sustainable Infrastructure plc announced a sale to Energy Capital Partners at a price of $22.00 per share. The purchase price represents a premium to Atlantica's Sustainable price before rumors of the deal. We examine the deal valuation from AY and Algonquin Power & Utilities Corp.'s perspective and tell you why a slightly higher price is probable. Read the full article on Seeking Alpha
Analysis Article • May 26

Estimating The Intrinsic Value Of Atlantica Sustainable Infrastructure plc (NASDAQ:AY)

Key Insights Atlantica Sustainable Infrastructure's estimated fair value is US$26.32 based on Dividend Discount Model...
Analysis Article • May 12

Atlantica Sustainable Infrastructure plc's (NASDAQ:AY) P/S Is Still On The Mark Following 26% Share Price Bounce

The Atlantica Sustainable Infrastructure plc ( NASDAQ:AY ) share price has done very well over the last month, posting...
Seeking Alpha • May 04

Atlantica Sustainable: Big Dividends Compensate For Risks (Rating Upgrade)

Summary Atlantica Sustainable Infrastructure's stock price fall has arrested YTD, with support from its full year 2024 outlook and recent acquisitions. The guidance indicates that its already healthy dividends can continue to rise. There can be risks ahead, but even taking them into account, the dividend yield still looks strong. The stock's P/E has risen since I last checked, but remains below the long-term average, adding to its attractiveness. Read the full article on Seeking Alpha
Analysis Article • Apr 23

Is Now An Opportune Moment To Examine Atlantica Sustainable Infrastructure plc (NASDAQ:AY)?

Atlantica Sustainable Infrastructure plc ( NASDAQ:AY ), might not be a large cap stock, but it received a lot of...
Analysis Article • Apr 10

Atlantica Sustainable Infrastructure (NASDAQ:AY) Takes On Some Risk With Its Use Of Debt

Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...
Seeking Alpha • Apr 02

Atlantica Sustainable: Too Low A Margin Of Safety To Weather Medium-Term Risks (Rating Downgrade)

Summary Atlantica Sustainable Infrastructure's stock continues to underperform the market. Despite the attractive and still stable dividend, the Stock is down due to subpar Q4 2023 results and a weaker outlook. I do not see any major risks for AY that could cause the dividend to get cut in 2024. Considering the forthcoming debt maturities and asset quality declines, if the interest rates do not trend downward, the Company might be forced to revise its dividend. In this article, I explain why I have decided to apply a more conservative view by downgrading the Stock from buy to hold. Read the full article on Seeking Alpha
Seeking Alpha • Mar 05

Atlantica Sustainable Infrastructure: A Bargain At A 10%+ CAFD Yield

Summary Atlantica Sustainable Infrastructure's "Strategic Review" is still ongoing, but full year 2023 results and FY2024 guidance show undervalued shares. The company's partner in the Monterrey asset plans to sell their stake, providing net proceeds to finance current projects. The company's development pipeline has expanded, with a focus on solar and battery storage projects in North America. Read the full article on Seeking Alpha
Analysis Article • Mar 04

Atlantica Sustainable Infrastructure plc Just Recorded A 45% EPS Beat: Here's What Analysts Are Forecasting Next

Atlantica Sustainable Infrastructure plc ( NASDAQ:AY ) came out with its yearly results last week, and we wanted to see...
Analysis Article • Feb 21

Atlantica Sustainable Infrastructure plc's (NASDAQ:AY) Share Price Not Quite Adding Up

With a median price-to-sales (or "P/S") ratio of close to 2x in the Renewable Energy industry in the United States, you...
Seeking Alpha • Feb 01

Atlantica Sustainable Infrastructure: Think About Total Returns

Summary The highlight feature of Atlantica Sustainable Infrastructure stock is its dividend yield of 9.2%. But this hasn't been enough to make up for price declines in the past year. With a return to net profits, the company's market multiples do look improved from a historical standpoint, though steadiness in revenues and adjusted EBITDA would be vital to price too. The company's 2023 results due later this month can provide more insight into its expectations for 2024, which can be critical to assess whether a price uptick is likely now. Read the full article on Seeking Alpha
Seeking Alpha • Jan 22

Atlantica Sustainable: Demystifying The Sustainability Of The Dividend

Summary Atlantica Sustainable Infrastructure is a green energy company with a portfolio of 2.2 GW operating assets, primarily in renewables. At first glance, AY's dividend of 9% could be viewed as speculative considering its level and the fact that the share price has dropped by ~30% in the last year. Despite the above and the history of dividend cuts, I provide three reasons why the dividend is actually safe, making the overall investment thesis attractive for yield-seeking investors. Read the full article on Seeking Alpha
Analysis Article • Jan 19

What Is Atlantica Sustainable Infrastructure plc's (NASDAQ:AY) Share Price Doing?

Atlantica Sustainable Infrastructure plc ( NASDAQ:AY ), might not be a large cap stock, but it saw a double-digit share...
Analysis Article • Jan 04

Does Atlantica Sustainable Infrastructure (NASDAQ:AY) Have A Healthy Balance Sheet?

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...
Analysis Article • Dec 14

Atlantica Sustainable Infrastructure (NASDAQ:AY) May Have Issues Allocating Its Capital

To avoid investing in a business that's in decline, there's a few financial metrics that can provide early indications...
Analysis Article • Nov 14

Atlantica Sustainable Infrastructure plc (NASDAQ:AY) Shares Could Be 33% Below Their Intrinsic Value Estimate

Key Insights The projected fair value for Atlantica Sustainable Infrastructure is US$26.85 based on Dividend Discount...
Analysis Article • Sep 25

Is Atlantica Sustainable Infrastructure (NASDAQ:AY) Using Too Much Debt?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...
Analysis Article • Aug 24

Atlantica Sustainable Infrastructure (NASDAQ:AY) May Have Issues Allocating Its Capital

If you're looking at a mature business that's past the growth phase, what are some of the underlying trends that pop...
Analysis Article • Jun 26

Atlantica Sustainable Infrastructure (NASDAQ:AY) Use Of Debt Could Be Considered Risky

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
Analysis Article • May 10

Returns On Capital At Atlantica Sustainable Infrastructure (NASDAQ:AY) Paint A Concerning Picture

When it comes to investing, there are some useful financial metrics that can warn us when a business is potentially in...
Analysis Article • Mar 28

Is Atlantica Sustainable Infrastructure (NASDAQ:AY) Using Too Much Debt?

The external fund manager backed by Berkshire Hathaway's Charlie Munger, Li Lu, makes no bones about it when he says...
Analysis Article • Dec 08

Is Atlantica Sustainable Infrastructure (NASDAQ:AY) Using Too Much Debt?

Howard Marks put it nicely when he said that, rather than worrying about share price volatility, 'The possibility of...
Analysis Article • Oct 27

Atlantica Sustainable Infrastructure (NASDAQ:AY) Could Be At Risk Of Shrinking As A Company

If you're looking at a mature business that's past the growth phase, what are some of the underlying trends that pop...
Seeking Alpha • Sep 14

Atlantica Sustainable Infrastructure: Solid Dividends, Upside In Renewables

Summary Atlantica has been reducing debt and continues to present strong fundamentals. Debt levels in this environment can sign the need for caution, but Atlantica has been reducing debt effectively. Atlantica dividend growth looks to be steady, making this a good renewables and sustainability dividend play - but does it have further upside potential? In this article, I examine the investment opportunities in Atlantica Sustainable Infrastructure plc (NASDAQ:AY). It is an investment that should be on the radar of investors with an ESG or sustainability focus, as it is a relatively pure renewable energy play. Atlantica focuses on the acquisition and management of renewable energy sources. They have a mix of conventional power, as well as transmission infrastructure and water assets. Recent management moves have been to reduce debt, and they have been raising their dividend. Does this make Atlantica a worthwhile utilities investment at this price? Atlantica benefits from reasonable diversification over its projects and geography. They focus primarily on North America and Europe, Middle East, and Africa (EMEA) region (Figure 1). Figure 1. Atlantica Sustainable's revenue by geography (BusinessQuant) Atlantica Sustainable has other segments, despite the name suggesting an entire sustainability focus. However, as Figure 2 shows, most of the revenue and, therefore, the overall narrative for the company, is indeed in the renewables space. Figure 2. Atlantica Sustainable's revenue by segment showing the strength of renewables focus (BusinessQuant) If this will be a play on long-term shifts to renewable energy, we would expect to see an increasing production in the Atlantica Renewables segment. Figure 3 shows the quarterly data from 2016, with the expected seasonal cycles but also showing a clear upward trend. It is also important to note that the increases in the first half of 2022 were substantially higher than in 2021 because of a recent acquisition. Figure 3. Increasing renewables production levels at Atlantica Sustainable (BusinessQuant) The Q2 2022 results were encouraging. The H1 2022 results showed that revenue in renewables was down 11%, while adjusted EBITDA was marginally improved by 1%. The overall margin, however, lifted from 63% to 71%. In both the North America and EMEA regions (the primary regions for Atlantica), margins improved. Risks and challenges There are several company-specific issues that I can identify, as well as wider sectoral trends. For Atlantica Sustainable, I have identified: They carry a high level of intangibles on the balance sheet. This presents a valuation risk. They are about 4/5 of the company's assets and I consider this to be high. However, I do note that they have been building up other assets and reducing this level over the last three years. Debt is always something to watch for Atlantica, as it is for many utilities. Atlantica has interest coverage hovering at just 1.0, which is not encouraging. However, Fitch affirmed the BB+ rating with Stable Rating Outlook, providing some confidence. The operating margin is reasonable, at 28.1% at the end of 2021. However, this has been declining since 2014, when it was 47% and, it held steady in the 40% range before the 2019 result of 46.1% at which point it dropped to 32.8% in 2020 before heading to 28.1% in 2021. Wider macroeconomic risks are likely in the EMEA geographic region, such as the European states' changing regulations. For example, Spain's Royal Decree-Law 6/2022 is a collection of measures focused on the electricity industry that may impact prices. However, it also brings benefits, as it includes measures to enhance and speed up the application procedures for new renewable projects, which might make it easier for Atlantica to consider expanding in the region. Things I like about Atlantica On the flip side, it is not all negative and there are several attractive elements when looking at this utility firm. Atlantica has maintained a healthy current ratio of 2.1 and a quick ratio of 2.0. They have a Price /FCF of 8.0, which is reasonably valued (Source: Stock Rover). The Q2 2022 earnings presentation notes the improvements in the debt load. Project debt was $4,501.8 million at the end of 2021 and had been lowered to $4,190.4 million by 30 June 2022. This was a rapid improvement in the debt position. The cash available for distribution (or CAFD) lifted 6.7% YoY, while the CAFD per share lifted 4.0% YoY (Source: Q2 2022 results). There has been a significant expansion in the shares issued, particularly over the 2020-2021 period (Figure 4). While not unusual with a utility, this is something I monitor. The efforts being made to lower the debt levels should, over time, provide a buffer and allow the CAFD per share to increase. Ultimately, they are most likely to be valued as a dividend-paying utility. In this respect, Atlantica has a forward dividend yield of 5.29% with a five-year DGR of 13.78%. This is strong and will be attractive to many investors. The Q2 2022 results also suggest that CAFD comfortably covers dividends. AY Shares Outstanding data by YCharts The Q2 2022 earnings show that debt is also largely hedged and fixed, with 100% of the corporate debt and 93% of the project debt falling into this category, easing analysis and management and buffering against external shocks. The contracts also have some escalation factors built in, but not, perhaps, as much as I expected. 40% are indexed to inflation or based on inflation and 12% are fixed. This leaves 48% not indexed. So the company has some ability to manage the rising inflationary environment. Fitch puts it this way (emphasis added): Atlantica's portfolio of assets produces stable, predictable cash flows underpinned by long-term contracts with a weighted average remaining contract life of 15 years. Most counterparties have strong investment-grade ratings. The contracts are typically fixed-price with annual escalation mechanisms. Atlantica's portfolio does not bear material resource availability risk or commodity risk and does not depend on any single project for more than 15% of its project distributions. Overall, Atlantica's management has done an admirable job of managing the risk. Valuation and opportunity So there appear to be some challenges with Atlantica, but it has strong dividend payments and CAFD. We have seen that Atlantica has been working to reduce the debt load and expand its renewables. But we do not invest in the past - we need to look to the future. Analysts estimate some robust revenue and EBITDA growth in 2023 through to 2025 (Figure 5; the values on the left are historic values while the values on the right are estimates). This should enhance the vigor of Atlantica's investments in new projects while also ensuring dividends continue. Figure 5. Atlantica's EBITDA and Revenue data for recent past and estimates for several years (TIKR Terminal) I like companies with rising EPS values and dividends. Figure 6 presents both historic and analysts' estimates (beyond the 2022 value) for Atlantica. They estimate the dividends to continue rising, though at a steady rate. Analysts estimate the EPS values to mostly stabilize at a level higher than they are now. Figure 6. Atlantica's Dividends and earnings per share figures for past and estimates for future (TIKR Terminal) This leaves me with the question, is there an upside to an investment at this price? This is now a dividend play. Atlantica is facing a rising interest rates environment which may make debt more challenging to take on to finance further projects. It may limit them by how much they can grow revenue and squeeze out further dividends. Given the relative increases in revenue forecasted (Figure 5), I've opted for a five-year discounted cash flow ("DCF") Revenue-Exit model. I've used a conservative 10% for the discount rate and an exit multiple to revenue of 7.8x, which Atlantica has historically traded at 7.8x. However, I've looked at (BEP), (CWEN), (NEP), (OTCPK:BRLXF), (OTCPK:NPIFF), (OTCPK:TRSWF), and (OTCPK:ALRCF) and taken their average EV/Revenue (LTM) multiples as 10.7x, with quite a wide range of 7.3x to 16.7x. I feel that my use of an 7.8x exit multiple for Atlantica is, therefore, conservative, and lower than the peers. The fair value from this DCF computation is $38.98, suggesting an upside of about 17%.
Analysis Article • Aug 08

Atlantica Sustainable Infrastructure (NASDAQ:AY) Has A Somewhat Strained Balance Sheet

Warren Buffett famously said, 'Volatility is far from synonymous with risk.' So it seems the smart money knows that...

Shareholder Returns

AYUS Renewable EnergyUS Market
7D0.09%2.7%-0.8%
1Y3.5%16.6%27.1%

Return vs Industry: AY underperformed the US Renewable Energy industry which returned 73.8% over the past year.

Return vs Market: AY underperformed the US Market which returned 28.8% over the past year.

Price Volatility

Is AY's price volatile compared to industry and market?
AY volatility
AY Average Weekly Movement0.4%
Renewable Energy Industry Average Movement7.6%
Market Average Movement7.2%
10% most volatile stocks in US Market16.3%
10% least volatile stocks in US Market3.2%

Stable Share Price: AY has not had significant price volatility in the past 3 months compared to the US market.

Volatility Over Time: AY's weekly volatility (0%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
20131,366Santiago Seage Medelawww.atlantica.com

Atlantica Sustainable Infrastructure plc owns, manages, and invests in renewable energy, storage, natural gas and heat, electric transmission lines, and water assets in North America, South America, Europe, the Middle East, and Africa. The company was formerly known as Atlantica Yield plc and changed its name to Atlantica Sustainable Infrastructure plc in May 2020. Atlantica Sustainable Infrastructure plc was incorporated in 2013 and is based in Brentford, the United Kingdom.

Atlantica Sustainable Infrastructure plc Fundamentals Summary

How do Atlantica Sustainable Infrastructure's earnings and revenue compare to its market cap?
AY fundamental statistics
Market capUS$2.55b
Earnings (TTM)US$30.01m
Revenue (TTM)US$1.19b
85.1x
P/E Ratio
2.1x
P/S Ratio

Is AY overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report (TTM)
AY income statement (TTM)
RevenueUS$1.19b
Cost of RevenueUS$0
Gross ProfitUS$1.19b
Other ExpensesUS$1.16b
EarningsUS$30.01m

Last Reported Earnings

Sep 30, 2024

Next Earnings Date

n/a

Earnings per share (EPS)0.26
Gross Margin100.00%
Net Profit Margin2.52%
Debt/Equity Ratio379.7%

How did AY perform over the long term?

See historical performance and comparison

Dividends

4.0%
Current Dividend Yield
603%
Payout Ratio

Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/13 16:46
End of Day Share Price 2024/12/11 00:00
Earnings2024/09/30
Annual Earnings2023/12/31

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

Atlantica Sustainable Infrastructure plc is covered by 10 analysts. 4 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Gonzalo De Cueto MorenoBNP Paribas
John QuealyCanaccord Genuity
Jonathan ArnoldDeutsche Bank