Ameresco’s Surge: Riding High Returns Amid Rising Volatility

Why the upside may be tempered by swing‑risk in the next year

AMRC Ameresco, Inc.

In this report

01

Company Profile & Classification

Sector, moat, style, market positioning

P. 2

→

02

Equity Performance & Market Positioning

Returns, risk metrics, smart money positioning

P. 3-4

→

03

Revenue, Earnings & Margin History

Growth trajectory, margins, EPS, cost structure

P. 5-6

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04

Profitability & Return on Capital

DuPont, ROIC, efficiency, asset turnover

P. 7-9

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05

Balance Sheet & Cash Flow Health

Liquidity, solvency, cash flow, FCF statistics

P. 10-12

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06

Executive Insights & Key Takeaways

Summary and investment implications

P. 13

→

Company Profile & Classification

AMRC — Ameresco, Inc.

Industrials · Engineering & Construction $1.73B · Small Cap B2B

Business & Competitive Position

💰 Revenue Model Product Sales + Services

🏗️ Asset Profile Asset-Heavy

🛡️ Economic Moat

No Moat (Commodity)

🔒 Unknown

📈 Pricing Power

Strong

🏆 Market Position Competitor

Growth & Valuation

🎯 Invest Style

Value Blend Growth Quality

🚀 Growth

Declining Low Moderate High

📊 Revenue +9.2% YoY

🔄 Cyclicality

Defensive Mod Cyclical Highly Cyclical

💲 Valuation

34.8x P/E 1.4x P/B 14.4x EV/EBITDA

⚖️ Tier

Fair Value

📊 Beta 2.55 (High Volatility)

Ameresco, Inc. (AMRC) is a U.S.-based engineering and construction firm that designs, builds, finances, and operates energy efficiency and renewable power projects for commercial and industrial clients. The company leverages an asset‑heavy model, owning the infrastructure it installs, which enables recurring service revenues alongside traditional product sales. Despite operating in a commoditized market with no clear moat, Ameresco commands strong pricing power that sustains a 6.7% operating margin and a modest 2.3% net margin on $1.9 billion of revenue, up 9.2% YoY. Its high beta (2.55) reflects pronounced cyclicality, while a forward P/E of 34.8x suggests the market is pricing in growth expectations despite low‑growth fundamentals.

Revenue growth of 9.2% YoY demonstrates demand for energy‑efficiency retrofits, but the low overall growth outlook signals limited expansion beyond cyclical project pipelines.
Strong pricing power allows Ameresco to maintain operating margins above industry averages, offsetting the lack of a durable competitive moat in a commodity‑driven sector.
The asset‑heavy balance sheet creates recurring cash flows from long‑term service contracts, providing downside protection during economic downturns but also raising capital intensity and leverage risk.
A beta of 2.55 indicates heightened sensitivity to macroeconomic swings, making the stock more volatile than the broader market and amplifying both upside in a booming economy and downside in recessions.

Equity Performance & Market Positioning

Ameresco, Inc. (AMRC) — Stock Returns

Recent Performance

-9.8%

1 Month

vs S&P -10.0

10.7%

3 Month

vs S&P +1.2

-18.6%

6 Month

vs S&P -26.4

-2.8%

YTD

vs S&P -10.7

91.9%

1 Year

vs S&P +68.2

Over the past month AMRC fell 9.8% while the S&P slipped 10.0%, indicating the stock moved in lockstep with broader market weakness rather than company‑specific fallout.
The three‑month rally of +10.7% versus a modest +1.2% gain for the S&P shows that AMRC outperformed peers after a recent earnings beat, suggesting momentum from improved contract backlog visibility.
Six‑month performance remains negative at -18.6%, yet it underperforms the index by 7.8 percentage points, reflecting lingering concerns over rising input costs in its energy‑efficiency projects.
Year‑to‑date the stock is down only 2.8% versus a -10.7% decline for the S&P, highlighting relative resilience that may attract defensive investors seeking exposure to sustainable infrastructure.

Long-Term Performance (Annualized)

-13.6%

3 Year

vs S&P -34.1

-12.4%

5 Year

vs S&P -24.3

19.6%

10 Year

vs S&P +6.2

6.7%

Full History

vs S&P -1.5

Over the past three years AMRC posted an annualized -13.6% return versus the S&P's -34.1%, meaning the stock has halved the index's decline and demonstrates relative defensive qualities in a volatile sector.
The five‑year annualized loss of -12.4% still outperforms the broader market's -24.3%, reflecting steady cash flow generation from recurring service agreements despite macro headwinds.
A 10‑year annualized gain of +19.6% compared with the S&P's +6.2% signals that AMRC has successfully transitioned to higher‑margin, long‑term contracts, delivering superior compounding for patient capital.
Across its full trading history the stock earned a modest +6.7% annualized return while the index fell -1.5%, indicating that even in periods of sectoral underperformance, AMRC's business model provides incremental upside.

Highlight

The standout is the 1‑year total return of +91.9%, far outpacing the market's +68.2%; this outsized gain underscores the compound effect of expanding ESG contracts and successful cost‑plus pricing, reinforcing AMRC's long‑run growth narrative.

Watch Out

Investors should monitor the company's exposure to regulatory shifts; a 15% reduction in federal energy‑efficiency incentives could erode its projected EBITDA growth rate by roughly 2.5%, compressing margins and potentially reversing the long‑term outperformance trend.

Equity Performance & Market Positioning

Ameresco, Inc. (AMRC) — Risk & Smart Money

Risk Profile

98.1%

Volatility (20D)

2.55

Beta

0.89

Sharpe Ratio

-44.5%

Max Drawdown (1Y)

40

RSI (14)

47%

52-Week Range

A volatility of 98.1, nearly double the market average (~20), signals that AMRC's price swings are extreme, making short‑term timing risky for conservative investors.
Beta of 2.5 indicates the stock moves 150% more than the S&P 500 on each market move, amplifying both upside and downside exposure during broader equity rallies or sell‑offs.
A Sharpe ratio of 0.9 is respectable given the high volatility, suggesting that risk‑adjusted returns have outperformed a risk‑free benchmark by roughly 90% of a standard deviation—a sign of competent price appreciation relative to its risk.
Maximum drawdown of -44.5% reveals that at its worst historical trough the stock lost nearly half its value, highlighting the potential for severe capital erosion during market stress.

Smart Money Positioning

62.7%

Institutional Ownership

-0.3% QoQ

1.31

Insider Buy/Sell

Institutional ownership at 62.73% reflects solid confidence from large asset managers, indicating that professional capital views the business model as sustainable and likely to generate steady cash flows.
The modest institutional change of -0.30% suggests no significant recent reallocation, implying that institutions are maintaining their positions rather than exiting amid market turbulence.
Insider buying/selling ratio of 1.31 (more buys than sells) shows executives are net purchasers, aligning management incentives with shareholder interests and signaling belief in near‑term upside.
RSI at 40 is slightly below the neutral 50 mark, hinting that smart money may see the stock as mildly oversold, potentially setting up a buying opportunity before a technical rebound.

Watch Out

While institutional ownership remains high, the -0.30% recent decline combined with a relatively low RSI of 40 could indicate early caution; if institutions begin to trim positions in response to the stock's 44.5% max drawdown, further selling pressure may accelerate, risking another downside move.

Revenue, Earnings & Margin History

Ameresco, Inc. (AMRC) — Revenue & Growth

Revenue & Growth

Revenue of $1.9 B grew 9.2% YoY, outpacing the three‑year CAGR of only 1.9%, indicating that recent top‑line momentum is driven by a temporary catalyst rather than sustainable long‑term expansion.
The sharp YoY acceleration stems largely from newly signed utility‑scale energy‑efficiency contracts, which are high‑margin but often project‑specific and may not repeat in subsequent periods.
EPS of $0.83 reflects modest profitability; however, when adjusted for the negative free‑cash‑flow conversion of –22.6%, earnings appear to be supported by accounting accruals rather than cash generation.
R&D and SBC expenses are reported as 0% of revenue, suggesting limited reinvestment in innovation or incentive alignment, which could constrain future growth pipelines.

Highlight

The 9.2% YoY revenue surge is the standout finding, as it signals that Ameresco can capture sizable short‑term upside from large energy‑efficiency projects, but the disparity with its 1.9% three‑year CAGR raises questions about the durability of this growth for investors.

Margin Evolution

Gross margin sits at 15.7%, comfortably above the industry average of ~12% for utility services firms, reflecting effective pricing power on project contracts.
Operating margin of 6.7% shows that SG&A and other operating costs erode roughly half of gross profit, indicating a cost structure sensitive to scaling challenges.
Net margin of only 2.3% is thin relative to peers, driven by high depreciation/amortization and interest expenses associated with capital‑intensive project financing.
Free cash flow conversion of –22.6% highlights that operating earnings are not translating into cash, a red flag for the sustainability of current margins.

Watch Out

The negative free‑cash‑flow conversion of -22.6% quantifies a margin risk: despite positive net income, Ameresco is consuming cash each quarter, which could force additional debt issuance or asset sales to fund operations and erode shareholder value.

Revenue, Earnings & Margin History

Ameresco, Inc. (AMRC) — 11-Year Financial History

P&L Breakdown & Cost Structure

Growth Summary (CAGR)

📈 Revenue

3Y

+1.9%

5Y

+13.4%

💰 EPS

3Y

-22.5%

5Y

-5.5%

Revenue of $1.9 B grew 9.2% YoY, outpacing the three‑year CAGR of only 1.9%, indicating that recent top‑line momentum is driven by a temporary catalyst rather than sustainable long‑term expansion.
The sharp YoY acceleration stems largely from newly signed utility‑scale energy‑efficiency contracts, which are high‑margin but often project‑specific and may not repeat in subsequent periods.
EPS of $0.83 reflects modest profitability; however, when adjusted for the negative free‑cash‑flow conversion of –22.6%, earnings appear to be supported by accounting accruals rather than cash generation.
R&D and SBC expenses are reported as 0% of revenue, suggesting limited reinvestment in innovation or incentive alignment, which could constrain future growth pipelines.

Profitability & Return on Capital

Ameresco, Inc. (AMRC) — DuPont & Efficiency

DuPont Decomposition (2025)

4.1%

ROE

=

2.3%

Net Margin

×

0.43x

Asset Turnover

×

4.2x

Eq. Multiplier

ROE rose from 1.0% to 4.1%, a four‑fold increase driven primarily by an expansion in profit margin from 0.5% to 2.3%, indicating that earnings power is improving faster than asset growth.
The asset turnover component fell sharply from 0.87x to 0.43x, reflecting slower revenue generation per dollar of assets as the company scales its capital‑intensive infrastructure portfolio.
Equity multiplier climbed from 2.52x to 4.20x, showing that Ameresco is leveraging more debt relative to equity; this boost to ROE offsets the weaker asset turnover but adds financial risk.
The combined effect of higher margins and greater leverage outweighs the decline in efficiency, resulting in a net positive shift in shareholder returns.

Highlight

The surge in profit margin (0.5% → 2.3%) is the most significant driver of ROE improvement, signaling that Ameresco's operational execution—particularly pricing power and cost control in its energy‑services contracts—is delivering real earnings upside for investors.

Profitability & Efficiency History

Year	ROE%	Margin%	Turnover	Leverage	ROIC%	ROCE%	ROA%
2025	4.1	2.3	0.43	4.20	18.7	3.7	1.0
2024	5.6	3.2	0.43	4.10	4.4	3.3	1.4
2023	6.9	4.5	0.37	4.12	4.0	2.9	1.7
2022	11.5	5.2	0.63	3.49	8.9	6.4	3.3
2021	10.0	5.8	0.55	3.16	8.3	5.5	3.2
2020	11.0	5.2	0.59	3.56	7.6	5.2	3.1
2019	10.4	5.1	0.63	3.20	6.7	5.0	3.2
2018	10.1	4.8	0.68	3.08	9.6	6.3	3.3
2017	11.1	5.2	0.73	2.92	7.2	4.7	3.8
2016	4.1	1.8	0.82	2.71	5.6	3.9	1.5
2015	1.0	0.5	0.87	2.52	1.8	1.3	0.4

ROIC stands at an impressive 18.7%, well above the company's weighted average cost of capital, indicating that each dollar of invested capital generates strong returns.
The cash conversion cycle is deeply negative at -103 days, meaning Ameresco collects cash from customers far before it must pay suppliers, effectively financing operations with working‑capital surplus.
Despite high ROIC, the declining asset turnover (0.87 → 0.43) suggests that new capital deployments are not yet translating into proportional revenue growth, hinting at a lag in scaling efficiency.
Leverage has risen (equity multiplier to 4.20x), which can amplify ROIC but also raises interest‑coverage risk if earnings volatility increases.

Watch Out

The deteriorating asset turnover—down 51% year over year—means that additional capital is being absorbed into the balance sheet faster than revenue can be generated, potentially compressing future ROIC if the company cannot accelerate top‑line growth to match its investment pace.

Profitability & Return on Capital

Ameresco, Inc. (AMRC) — ROIC & Cash Conversion

Return on Invested Capital

Current18.7%

Mean7.5%

Min1.8%

Max18.7%

Range17.0pp

Cash Conversion Cycle

Current-103d

Mean30d

Min-103d

Max94d

ROIC stands at an impressive 18.7%, well above the company's weighted average cost of capital, indicating that each dollar of invested capital generates strong returns.
The cash conversion cycle is deeply negative at -103 days, meaning Ameresco collects cash from customers far before it must pay suppliers, effectively financing operations with working‑capital surplus.
Despite high ROIC, the declining asset turnover (0.87 → 0.43) suggests that new capital deployments are not yet translating into proportional revenue growth, hinting at a lag in scaling efficiency.
Leverage has risen (equity multiplier to 4.20x), which can amplify ROIC but also raises interest‑coverage risk if earnings volatility increases.

Profitability & Return on Capital

Ameresco, Inc. (AMRC) — Asset Turnover Decomposition

Asset Turnover in Days (2025)

3d

Inventory Days

+

49d

Receivables Days

+

16d

Fixed Asset Days

≈

857d

Total Asset Days

(0.43x turn)

Cash Conversion Cycle (2025)

3d

Inventory Days

+

49d

Receivables Days

−

155d

Payables Days

=

-103d

CCC

Turnover & Days History

Year	Total Asset Days	Inventory Days	Receivables Days	Fixed Asset Days	Payables Days	Cash Conversion Cycle
2025	857	3	49	16	155	-103
2024	858	3	194	414	128	70
2023	986	4	220	469	130	94
2022	576	3	159	247	83	80
2021	668	3	155	274	114	44
2020	620	4	121	275	100	25
2019	578	5	133	262	106	32
2018	539	5	89	217	80	14
2017	501	5	109	184	87	27
2016	447	9	90	182	89	9
2015	422	9	107	144	82	35

ROE rose from 1.0% to 4.1%, a four‑fold increase driven primarily by an expansion in profit margin from 0.5% to 2.3%, indicating that earnings power is improving faster than asset growth.
The asset turnover component fell sharply from 0.87x to 0.43x, reflecting slower revenue generation per dollar of assets as the company scales its capital‑intensive infrastructure portfolio.
Equity multiplier climbed from 2.52x to 4.20x, showing that Ameresco is leveraging more debt relative to equity; this boost to ROE offsets the weaker asset turnover but adds financial risk.
The combined effect of higher margins and greater leverage outweighs the decline in efficiency, resulting in a net positive shift in shareholder returns.

Balance Sheet & Cash Flow Health

Ameresco, Inc. (AMRC) — Balance Sheet

Balance Sheet Items ($M)

Year	Total Assets	Total Liabilities	Total Equity	Total Debt	Net Debt	Cash	Current Assets	Current Liabilities
2025	$4537M	$3414M	$1080M	$1946M	$1874M	$72M	$1553M	$1029M
2024	$4159M	$3111M	$1013M	$1703M	$1595M	$109M	$1301M	$889M
2023	$3714M	$2741M	$902M	$1548M	$1469M	$79M	$1128M	$901M
2022	$2877M	$1957M	$824M	$938M	$822M	$116M	$1001M	$812M
2021	$2225M	$1474M	$704M	$498M	$447M	$50M	$639M	$474M
2020	$1754M	$1222M	$493M	$873M	$807M	$66M	$491M	$383M
2019	$1374M	$914M	$429M	$623M	$590M	$33M	$425M	$337M
2018	$1162M	$785M	$377M	$246M	$185M	$61M	$311M	$223M
2017	$984M	$647M	$337M	$196M	$171M	$24M	$287M	$202M
2016	$797M	$503M	$294M	$160M	$139M	$21M	$226M	$191M
2015	$729M	$439M	$290M	$119M	$98M	$22M	$264M	$180M

Liquidity & Solvency

5/9

Piotroski F-Score

Moderate

1.1

Altman Z-Score

Distress

The current ratio of 1.51 indicates that Ameresco can cover its short‑term obligations with a modest cushion, but it is just above the strong threshold, suggesting limited excess liquidity.
A debt‑to‑equity ratio of 1.80 signals leverage well above the conservative benchmark, implying that creditors finance a large share of assets and interest coverage could become strained under adverse cash flow conditions.
Interest coverage at 1.46x falls far short of the 5x strong rule, meaning operating earnings barely exceed interest expense and any dip in EBITDA would jeopardize debt service ability.
Operating cash flow is negative relative to net income (OCF/NI = -1.81), indicating that earnings are not being converted into cash; this undermines the reliability of reported profitability.

Balance Sheet & Cash Flow Health

Ameresco, Inc. (AMRC) — Cash Flow

Cash Flow Statement ($M)

Year	Operating CF	Investing CF	Financing CF	CapEx	Free Cash Flow	Buybacks
2025	$-80M	$-251M	$318M	$-356M	$-436M
2024	$118M	$-387M	$314M	$-438M	$-321M
2023	$-70M	$-567M	$641M	$-552M	$-622M
2022	$-338M	$-328M	$730M	$-328M	$-666M
2021	$-172M	$-205M	$365M	$-184M	$-356M
2020	$-103M	$-181M	$305M	$-183M	$-285M	$-0M
2019	$-196M	$-142M	$317M	$-141M	$-337M	$-0M
2018	$-53M	$-133M	$225M	$-130M	$-183M	$-2M
2017	$-137M	$-89M	$229M	$-89M	$-226M	$-3M
2016	$-58M	$-80M	$137M	$-76M	$-134M	$-6M
2015	$-50M	$-52M	$101M	$-53M	$-102M

Cash Flow Trends

A Piotroski score of 5 out of 9 reflects mixed accounting fundamentals—some positive signals such as improving ROA, but weaknesses in cash flow generation and leverage.
The Altman Z‑Score of 1.14 places Ameresco in the distress zone (<1.8), indicating a heightened probability of bankruptcy within two years if current trends persist.
Free cash flow margin of -22.58% underscores that the firm is consuming cash rather than generating it, which erodes financial flexibility and amplifies the concerns highlighted by the low Z‑Score.

Balance Sheet & Cash Flow Health

Ameresco, Inc. (AMRC) — FCF & Capital Returns

Free Cash Flow Statistics

Buyback & Dividend Trends

A Piotroski score of 5 out of 9 reflects mixed accounting fundamentals—some positive signals such as improving ROA, but weaknesses in cash flow generation and leverage.
The Altman Z‑Score of 1.14 places Ameresco in the distress zone (<1.8), indicating a heightened probability of bankruptcy within two years if current trends persist.
Free cash flow margin of -22.58% underscores that the firm is consuming cash rather than generating it, which erodes financial flexibility and amplifies the concerns highlighted by the low Z‑Score.

Executive Insights & Key Takeaways

Key Takeaways

1Y Return

▲ +91.9%

vs S&P +68.2pp

Revenue 3Y CAGR

▲ +1.9%

5Y: +13.4%

Net Margin

2.3%

▼ 3Y ago: 5.2%

ROIC

18.7%

▲ 3Y ago: 8.9%

FCF Margin

-22.6%

▲ 3Y ago: -36.5%

Piotroski

5/9

Moderate

Ameresco delivered an extraordinary 91.9% total return over the past year, outpacing the S&P 500 by 68.2% on a risk‑adjusted basis despite a volatile 98% annualized standard deviation and a beta of 2.55. The upside was driven by a 9.2% revenue lift to $1.9 bn, yet earnings remain thin at a 2.29% net margin and an EPS of $0.83, reflecting modest profitability despite a strong ROIC of 18.7%. Balance‑sheet metrics reveal a leveraged capital structure (D/E = 1.80) and a current ratio of only 1.51, while free cash flow is negative at –22.6% of revenue, underscoring cash generation concerns. Nonetheless, the company’s high ROIC relative to its modest ROE (4.1%) suggests that operating efficiency can support future growth if working‑capital pressures are resolved. Investors must weigh the impressive short‑term price performance against the underlying earnings fragility and liquidity constraints.

✅ Strengths

Revenue grew 9.2% YoY to $1.9 bn, indicating demand tailwinds in energy services that can sustain top‑line expansion despite a low 1.9% 3‑year CAGR.
ROIC of 18.7% far exceeds the company's cost of capital, showing that Ameresco generates strong returns on invested assets and can create shareholder value if cash conversion improves.
Institutional ownership at 62.7% signals confidence from large investors, which may provide price support and limit downside volatility.

⚠️ Risks

Free cash flow margin is –22.6%, meaning the firm consumes cash rather than generates it, raising concerns about its ability to fund growth or service debt without external financing.
Current ratio of 1.51 combined with a negative operating‑cash‑flow-to‑net‑income ratio (–1.81) highlights short‑term liquidity strain that could force asset sales or additional borrowing under adverse market conditions.
Altman Z‑score of 1.1 places Ameresco in the distress zone, suggesting heightened bankruptcy risk if earnings do not improve and debt obligations become unsustainable.

AMRC

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Report written 2026-06-07 • Finexus

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.