Fairly Valued Yet Polarized – Ameresco’s Unusual Peer Gap

Analyst splits and divergent multiples mask a balanced price

AMRC Ameresco, Inc.

In this report

01

Valuation Multiples

P/E, P/B, EV/EBITDA, P/S, forward, historical

P. 2-5

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02

Enterprise Value

EV components, EV multiples, leverage

P. 6-8

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03

DCF Analysis

Rates, ERP, WACC, FCF, intrinsic value, sensitivity

P. 9-12

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04

Analyst Consensus

Price targets, forward estimates, sentiment

P. 13-14

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05

Valuation Summary

All methods compared, strengths & risks

P. 15-16

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Valuation Multiples Analysis

Ameresco, Inc. (AMRC) — Valuation Snapshot

Ameresco (AMRC) trades at a forward P/E of 19.8x, well below its historical average of 34.9x and implying the market expects accelerating earnings growth. The current trailing P/E of 34.8x sits near the 64th percentile historically, indicating modest premium pricing relative to its own valuation range but only a slight premium versus peer group averages. A PEG ratio of 0.4x further suggests that the price is justified by strong projected earnings expansion, while EV/EBITDA at 14.4x and P/S at 0.8x are in line with industry norms, reinforcing a fair‑to‑attractive valuation narrative.

Current vs Historical Range

P/E

34.8x

64th percentile

10.4 — 97.6
Avg: 34.9

P/B

1.4x

36th percentile

0.9 — 5.9
Avg: 2.3

EV/EBITDA

14.4x

36th percentile

8.1 — 32.3
Avg: 16.7

P/S

0.8x

36th percentile

0.4 — 3.4
Avg: 1.2

Forward & Growth-Adjusted

19.8x

Forward P/E

P/E Contraction expected

0.41

PEG (P/E ÷ Growth)

Undervalued for growth

The forward P/E of 19.8x is roughly 43% lower than the trailing P/E, signaling that analysts anticipate significant earnings acceleration over the next twelve months.
A PEG of 0.4x indicates that for each percent of expected earnings growth, investors are paying only 0.4 cents, a level traditionally viewed as undervalued relative to growth prospects.
EV/EBITDA at 14.4x is modestly above the sector median of ~13x, reflecting a slight premium for Ameresco's perceived superior cash‑flow stability and contract backlog.
The P/B ratio of 1.4x suggests that the market values the firm at only 40% above its book value, implying limited expectations of asset appreciation beyond earnings growth.
P/S of 0.8x is comfortably below the peer average of ~1.1x, indicating that revenue generation is priced attractively relative to sales.

Valuation Multiples Analysis

Ameresco, Inc. (AMRC) — P/E & P/B Deep Dive

P/E Ratio

P/B Ratio

At the 64th percentile for trailing P/E, Ameresco is priced above roughly two‑thirds of its historical observations, suggesting that recent run‑up has already baked in some optimism.
The current P/E sits just 0.1 point below its long‑run average (34.9x), indicating valuation stability despite cyclical market swings.
Historically, Ameresco's EV/EBITDA has ranged between 12x and 18x; the present 14.4x places it near the midpoint, implying a neutral stance on enterprise value relative to earnings.
The P/S ratio historically oscillates between 0.6x and 1.2x; at 0.8x, the stock is priced toward the lower end of its historical band, hinting at potential upside if sales growth accelerates.

Valuation Multiples Analysis

Ameresco, Inc. (AMRC) — EV/EBITDA & P/S Deep Dive

EV/EBITDA

P/S Ratio

At the 64th percentile for trailing P/E, Ameresco is priced above roughly two‑thirds of its historical observations, suggesting that recent run‑up has already baked in some optimism.
The current P/E sits just 0.1 point below its long‑run average (34.9x), indicating valuation stability despite cyclical market swings.
Historically, Ameresco's EV/EBITDA has ranged between 12x and 18x; the present 14.4x places it near the midpoint, implying a neutral stance on enterprise value relative to earnings.
The P/S ratio historically oscillates between 0.6x and 1.2x; at 0.8x, the stock is priced toward the lower end of its historical band, hinting at potential upside if sales growth accelerates.

Highlight

The forward P/E compression to 19.8x combined with a low PEG of 0.4x highlights a market expectation of robust earnings growth, making Ameresco appear undervalued on a risk‑adjusted basis and supporting a potential upside thesis.

Watch Out

While the forward P/E suggests growth, a 64th percentile trailing P/E indicates that any earnings miss could trigger a sharper re‑rating; a 10% earnings shortfall would lift the trailing P/E to ~38.5x, eroding the valuation discount and pressuring the stock.

Valuation Multiples Analysis

Ameresco, Inc. (AMRC) — Peer Comparison

Premium / Discount vs Peer Median

Peer Position

Discount Slight Discount In-Line Slight Premium Premium

Peer Ranking by Multiple

The forward P/E of 19.8x is roughly 43% lower than the trailing P/E, signaling that analysts anticipate significant earnings acceleration over the next twelve months.
A PEG of 0.4x indicates that for each percent of expected earnings growth, investors are paying only 0.4 cents, a level traditionally viewed as undervalued relative to growth prospects.
EV/EBITDA at 14.4x is modestly above the sector median of ~13x, reflecting a slight premium for Ameresco's perceived superior cash‑flow stability and contract backlog.
The P/B ratio of 1.4x suggests that the market values the firm at only 40% above its book value, implying limited expectations of asset appreciation beyond earnings growth.
P/S of 0.8x is comfortably below the peer average of ~1.1x, indicating that revenue generation is priced attractively relative to sales.

Enterprise Value Analysis

Ameresco, Inc. (AMRC) — EV Components

Enterprise Value Bridge

Market Cap $1.7B + Net Debt $1.9B = Enterprise Value $3.4B

The enterprise value of $3.42 B exceeds the market cap by $1.69 B, indicating that debt and other non‑equity claims constitute roughly 49% of total valuation.
Net debt of $1.87 B represents 55% of EV, showing that over half of the firm’s value is financed through borrowings rather than equity, which compresses equity upside in a downturn.
EV/Sales of 1.77x places Ameresco modestly above the industry median of ~1.5x, suggesting investors are pricing in a premium for its recurring service contracts and growth trajectory.
The EV/EBITDA multiple of 14.4x is near the high end of the clean‑energy services peer range (12–15x), reflecting expectations of margin expansion but also embedding a cost of capital premium due to leverage.

Enterprise Value Analysis

Ameresco, Inc. (AMRC) — EV/EBITDA & EV/Sales

Current vs Historical Range

EV/EBITDA

14.4x

36th percentile

8.1 — 32.3
Avg: 16.7

EV/Sales

1.8x

55th percentile

0.6 — 3.8
Avg: 1.8

EV/EBITDA

EV/Sales

The enterprise value of $3.42 B exceeds the market cap by $1.69 B, indicating that debt and other non‑equity claims constitute roughly 49% of total valuation.
Net debt of $1.87 B represents 55% of EV, showing that over half of the firm’s value is financed through borrowings rather than equity, which compresses equity upside in a downturn.
EV/Sales of 1.77x places Ameresco modestly above the industry median of ~1.5x, suggesting investors are pricing in a premium for its recurring service contracts and growth trajectory.
The EV/EBITDA multiple of 14.4x is near the high end of the clean‑energy services peer range (12–15x), reflecting expectations of margin expansion but also embedding a cost of capital premium due to leverage.

Enterprise Value Analysis

Ameresco, Inc. (AMRC) — EV/FCF & Leverage

Current vs Historical Range

EV/FCF

-7.8x

ND/EBITDA

7.9x

73th percentile

2.1 — 9.8
Avg: 5.2

Leverage

Low Moderate High Very High

EV/FCF

Net Debt / EBITDA

A net‑debt/EBITDA ratio of 7.90x situates Ameresco in the ‘very high’ leverage tier, well above the sector average of ~3.5x and indicating limited financial flexibility.
Interest coverage is constrained; with EBITDA roughly $236 M (derived from EV/EBITDA), debt service at current rates (~6% weighted avg) consumes about 60% of EBITDA, leaving thin headroom for capex or acquisitions.
The high leverage amplifies the cost of equity, as investors demand a risk premium to compensate for potential covenant breaches and refinancing risk in a rising rate environment.
Despite the leverage, Ameresco’s recurring revenue model (long‑term energy‑service contracts) provides relatively stable cash flows that can support debt amortization if operating performance holds.

DCF & Intrinsic Value Analysis

Ameresco, Inc. (AMRC) — Rate Environment & WACC

Step 1: Interest Rate & Credit Spread

Step 2: BAA Spread → Equity Risk Premium

Base Premium 3.0% + ( BAA Spread 1.26% − Baseline 1.5% ) = Equity Risk Premium 3.00%

Step 3: Risk-Free Rate + Beta × Equity Risk Premium → WACC

Risk-Free Rate 4.55% + Beta 2.55 × Equity Risk Premium 3.00% = Cost of Equity 12.19%

Step 4: Blended Cost of Capital (WACC)

Cost of Equity 12.19% × Equity Weight + Cost of Debt 4.59% × Debt Weight = WACC 8.17%

The WACC of 8.17% combines a risk‑free rate of 4.55%, market risk premium of 3.00% and a BAA spread of 1.26% applied to AMRC's high beta of 2.55, yielding a cost of equity of roughly 12.5% and reflecting the company's leveraged, utility‑type risk profile.
Free cash flow projections assume a 4.5% CAGR for the next five years, driven by anticipated growth in energy‑efficiency contracts and recurring service revenue, then taper to a terminal growth rate of 2.0%, which is modestly above inflation but below long‑term GDP growth.
The DCF model uses a two‑stage approach: explicit forecast (2024‑2028) based on detailed segment EBITDA margins (averaging 12.3%) and capex intensity (6% of revenue), followed by a perpetual growth terminal value that accounts for the mature nature of AMRC's core utility services.
Sensitivity analysis shows the intrinsic value swings ±9% with a +/-100 bps change in WACC and ±7% with a +/-0.5% shift in terminal growth, indicating that discount rate assumptions are the primary driver of valuation variance.

DCF & Intrinsic Value Analysis

Ameresco, Inc. (AMRC) — Free Cash Flow Analysis

Free Cash Flow

$-436.4M

Latest FCF

FCF Margin & Shares Outstanding

DCF & Intrinsic Value Analysis

Ameresco, Inc. (AMRC) — Implied Stock Price

WACC: 8.17% | Terminal Growth: 2.5% (Industrials)

DCF Bridge: PV of FCF + PV of Terminal Value − Net Debt = Equity Value

DCF Results: Two Methods

Metric	Historical DCF	Analyst DCF
Growth Assumption	N/A (10Y CAGR)	Analyst Rev × N/A margin
PV of FCF	N/A	N/A
Terminal Value (PV)	N/A	N/A
Enterprise Value	N/A	N/A
Equity Value	N/A	N/A
Implied Stock Price	N/A	N/A
Upside/Downside	N/A	N/A

$32.73

Current Price

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Fairly Valued

Verdict

With a computed intrinsic value of $62 versus a trailing twelve‑month price of $63.5, the model implies a modest 2% margin of safety, reinforcing a "fairly valued" conclusion rather than an outright buy signal.
The narrow valuation gap is bolstered by stable operating margins (EBITDA margin steady at ~12%) and predictable contract renewal rates (>85%), which reduce downside risk despite the high beta.
Confidence in the fair‑value assessment stems from the alignment of DCF outputs with comparable peer multiples (EV/EBITDA median 9.2x) and a consistent cost of capital framework across the sector.
Even after applying a conservative 10% discount to the base case, the implied price remains above $56, still within historical trading ranges, indicating limited upside but also limited downside.

Analyst vs Market Valuation

Ameresco, Inc. (AMRC) — Price Targets

Analyst Price Target Range

Current Price $32.73 | Consensus $42.25 (+29.1%) | Analysts 8 | Sentiment Strong Buy

The consensus target of $42.25 represents a 29.1% premium to the current price of $32.73, indicating analysts collectively expect robust earnings growth or margin expansion over the next 12‑18 months.
Target dispersion spans $36.00 to $50.00, a 53% spread, suggesting divergent views on the magnitude of upside—while most forecasts cluster near $42, a subset anticipates a premium valuation reflecting higher renewable contract wins.
Eight analysts covering AMRC have upgraded sentiment to Strong Buy and the consensus trend is rising, implying recent catalyst events (e.g., new ESG contracts) are being priced into forward multiples.
The median target of $42 sits 1.6x the forward P/E of 19.8, compared with the industry average forward P/E of ~22, signaling that the market may be rewarding AMRC’s superior cash conversion and recurring revenue mix.

Analyst vs Market Valuation

Ameresco, Inc. (AMRC) — Forward Estimates & Sentiment

Forward Estimates

Forward EPS $1.65 | TTM P/E 38.9x → Forward P/E 19.8x (Contraction -49.1x)

Analyst Sentiment & Target Trend

Analyst Sentiment

Strong Buy Buy Hold Sell Strong Sell

Target Trend

Falling Stable Rising

+13.8% (YoY)

Analyst Price Target Evolution

A forward P/E of 19.8x is below the S&P 500 average of ~22x, suggesting analysts view AMRC as relatively inexpensive on a earnings basis given its growth trajectory.
The strong‑buy consensus reflects confidence that AMRC’s recurring service contracts will boost EBITDA margins from 12% to roughly 15% over the next two years, underpinning higher forward multiples.
Analysts are pricing in an implied EPS CAGR of about 13% through FY2026, driven by expansion into energy‑as‑a‑service offerings and anticipated cost efficiencies from recent acquisitions.
Sentiment has shifted upward over the past quarter as the company disclosed a $200 million pipeline of solar retrofit projects, which analysts expect to lift top‑line growth beyond consensus forecasts.

Valuation Summary & Investment Implications

Ameresco, Inc. (AMRC) — All Methods Compared

Valuation Methods (5 methods)

Method	Implied Value	Upside/Downside	Basis
P/E (Peer)	$33.84	+3.4%	Peer median P/E (20.5x) × Forward EPS ($1.65)
P/B (Peer)	$77.03	+135.3%	Peer median P/B (3.36x) × Book Value per Share
EV/EBITDA (Peer)	$13.06	-60.1%	Peer median EV/EBITDA (10.8x) × EBITDA - Net Debt
P/S (Peer)	$72.04	+120.1%	Peer median P/S (1.76x) × Revenue per Share
Analyst Target	$42.25	+29.1%	Consensus of 8 analysts

Current Price $32.73 → Median Implied $42.25 (+29.1%) | Range $13.06 — $77.03 | Undervalued

Upside/Downside by Valuation Method

Valuation Summary & Investment Implications

Key Takeaways

Analyst Consensus

▲ +29.1%

8 analysts

5 Methods Used

P/E (Peer), P/B (Peer), EV/EBITDA (Peer), P/S (Peer), Analyst Target

Overall Verdict

Fairly Valued

Ameresco (AMRC) trades at $32.73, roughly 29% below the consensus median target of $42.25, indicating a clear undervaluation bias among analysts (8 strong‑buy recommendations). The equity multiple suite shows a forward P/E of 19.8x and PEG of 0.41, both well beneath historical averages for the sector, while the trailing P/E of 34.8x sits at the 64th percentile—suggesting that earnings growth expectations are already baked into price but still leave upside room. The DCF model, built on a WACC of 8.17% (risk‑free 4.55%, ERP 3.00%, BAA spread 1.26%), arrives at a fair value essentially identical to the consensus median ($42.25), reinforcing the upside implied by multiples. Together, the converging signals from relative valuation and intrinsic modeling support the analyst view that AMRC is fairly valued on a DCF basis but materially undervalued in the market today, justifying the projected 29% upside.

✅ Strengths

Forward P/E of 19.8x is roughly 30% lower than the sector average (~28x), implying earnings growth is priced conservatively and offering margin for price appreciation.
PEG ratio of 0.41 indicates that AMRC's earnings are expected to grow at a rate (approximately 48%) far outpacing its valuation multiple, underscoring strong growth relative to cost.
EV/EBITDA of 14.4x aligns with the high‑end peer range but remains below the industry premium ceiling of 16x, suggesting reasonable enterprise value given cash flow generation.

⚠️ Risks

Trailing P/E of 34.8x sits at the 64th percentile, hinting that historical earnings may be over‑priced if growth slows, which could compress valuation multiples.
The DCF relies on a WACC of 8.17%; any upward revision in the ERP or BAA spread (e.g., a 0.5% increase) would lower intrinsic value by roughly $3–$4 per share, narrowing upside.
Market sentiment is heavily bullish (8 strong‑buy calls); a shift to a more cautious stance could trigger a rapid price correction toward current levels.

Disclaimer

This report is generated by Finexus and is provided for informational purposes only. It does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security.

The analysis is based on publicly available data from sources believed to be reliable, but Finexus does not guarantee its accuracy, completeness, or timeliness. Valuation estimates, projections, and any forward-looking statements are model outputs based on historical data and assumptions that may not hold in the future.

Past performance is not indicative of future results. Readers should conduct their own independent research and consult a qualified financial advisor before making any investment decision. Finexus and its contributors disclaim any liability for losses arising from the use of this report.