AMRC
Ameresco, Inc.
$20.50
Cyclical & Capital-Intensive
80%
Normalized Earnings × Cycle Multiple
Mild
·
Conviction
Fair Value
Trading 2.7% below fair value
You pay
$20.50
Bear
$16.38
Fair
$21.06
Bull
$25.74
Bear
$16.38
-20.1%
$1.17 × 14x
Fair
$21.06
+2.7%
$1.17 × 18x
Bull
$25.74
+25.6%
$1.17 × 22x
Adjust Assumptions
18.0x
1.17$
Key Value Driver
Through-cycle normalized EPS ($1.17)
Implied Market Multiple
17.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (24 analysts)
$44.67
Divergence from AlphaVal
53%
Summary
Using 7-year normalized EPS of $1.17 at a 18x cycle multiple, the base-case value is $21.06 per share. P/TBV cross-check: 1.1x.
Warnings
This company has a built-in lending arm whose debt is mixed in with the main business. We capped the debt adjustment to avoid overstating what the core business owes.
This company has heavy ongoing investment costs. Valuation shortcuts that ignore those costs can make the stock look cheaper than it really is.
Wall Street's average price target is $44.67 (from 24 analysts). Our estimate is 53% below the consensus -- consider that gap carefully.
Key Risks
- Standard 10-year DCF produces unreliable terminal values for cyclicals
- 'Cheap' P/E at cycle peak is the most common value trap — normalize first
- Captive finance subsidiaries have different risk profiles from manufacturing