AMRC : NYSE : US$10.02
Ameresco is a leading provider of energy efficiency solutions for facilities throughout North America. Principal services include the development, design, engineering, and installation of projects that reduce the energy and operations & maintenance costs of facilities. The company also constructs and operates small-scale renewable energy plants.
All amounts in US$ unless otherwise noted.
Visibility gets a bit better in H2/13, as projects finally start to move and funded backlog growth is expected at long last. Given the attractive energy efficiency market (and the owner/operator model), we find the opportunity attractive.
We recently hosted a series of investor meetings with Ameresco management. In sum, progress continues to build for improvement later in H2/13, as efficiency projects remain attractive and cash flow from the underlying “concession” business (e.g., landfill gas) stays supportive.
Near term, the continued federal budgetary stalemate (and likely government shutdown) keeps headline risk elevated (though we don’t expect material impact). In our view, 2013 revenue/net income guidance still looks very achievable at ~$620-640M/$18- 21M.
Our price target adjusts to $12.50 (from $10.50) as we assign a higher multiple given expected movement in funded backlog and better operating leverage in H2/13.
Our $12.50 target is based on a ~13x (from ~12x) EV/EBITDA off 2014E.
Long & lumpy sales cycles, governmental customer concentration, project financing dependency, insider control.