Company Overview
Ameresco, Inc. operates as a provider of energy solutions across the United States, Canada, and Europe, functioning through distinct segments that include North America Regions, U.S. Federal, Renewable Fuels, Europe, and All Other operations. The company is situated within the Industrials sector and specifically within the Engineering & Construction industry, where its activities focus on delivering energy efficiency, infrastructure upgrades, energy security, and resilience projects. Ameresco maintains a significant market presence with a market capitalization of $1.50B, generating annual revenue of $1.93B while employing a workforce of 1601 individuals. These valuation and revenue figures indicate that Ameresco has established itself as a substantial entity within the engineering and construction space, supporting a large-scale operational footprint that spans multiple international jurisdictions and diverse project types.
Financial Health
The company reported revenue of $1.93B over the trailing twelve months, with a corresponding net income of $44.18M and an EBITDA of $230.25M, highlighting a substantial gap between operating earnings and bottom-line profit that reveals a heavy cost structure or significant non-operating expenses impacting the final net income figure. Free cash flow stands at $-335,935,264, indicating that the company is currently consuming cash rather than generating it, which suggests limited financial flexibility for discretionary spending or debt reduction without external financing. Ameresco's profitability is further characterized by a gross margin of 15.7%, an operating margin of 7.5%, and a profit margin of 2.3%, where these declining margins illustrate that while the company retains some pricing power, a significant portion of revenue is absorbed by direct costs and operating overhead before reaching the net income level. The balance sheet shows a cash position of $71.78M against total debt of $2.44B, resulting in a debt-to-equity ratio of 217.39, which demonstrates that the company is highly leveraged and carries a substantial fixed charge burden relative to its equity base. Liquidity is maintained at a current ratio of 1.51, indicating that the company holds sufficient current assets to cover its short-term liabilities with a 51% buffer, though the high debt level complicates the interpretation of this metric regarding long-term solvency. Return on equity is recorded at 5.2% and return on assets at 1.8%, metrics that reveal management effectiveness in generating returns is currently constrained, as the low ROA suggests that the asset base is not yielding substantial earnings relative to the capital employed.
Valuation Assessment
The valuation metrics show a trailing P/E ratio of 34.12 compared to a forward P/E of 17.27, implying that the market expects a significant turnaround in earnings performance to justify the high current multiple relative to future projections. The price-to-book ratio is 1.39, indicating that the market values the company at a 39% premium over its book value, which may reflect intangible assets or growth expectations not fully captured in the accounting equity. Alternative valuation measures include a price-to-sales ratio of 0.78 and an EV/EBITDA of 17.00, suggesting that the company trades at less than one dollar of market value per dollar of sales, yet the EV/EBITDA multiple remains elevated relative to traditional utilities or heavy industrials, reflecting the risk premium associated with its high debt load and volatile cash flows. The stock has exhibited significant price volatility over the last year, with a 52-week high of $44.93 and a 52-week low of $8.49, meaning the current price sits well below the peak valuation levels observed recently. This wide trading range is underscored by a beta of 2.60, which indicates that the stock price is highly sensitive to market movements and tends to fluctuate with more than double the intensity of the broader market index.
Growth & Income
Revenue growth over the last year stands at 9.1%, while earnings growth is negative at -51.7%, indicating that profitability is contracting at a rate far faster than top-line revenue expansion, which suggests rising costs or margin compression that are not being offset by volume increases. The company does not pay a dividend, evidenced by a dividend yield of N/A and a payout ratio of 0.0%, meaning that Ameresco retains all of its earnings to reinvest into its business operations rather than distributing income to shareholders. This reinvestment strategy aligns with the company's need to fund operations given the negative free cash flow and high debt obligations, prioritizing capital expenditure and debt management over shareholder distributions. Overall, the growth and income profile for Ameresco is defined by strong revenue expansion that has failed to translate into proportional earnings growth, coupled with an absence of dividend income and significant cash consumption that requires careful monitoring of future operational improvements.