A Current AIM Holding up 320+% Ameresco Inc. (AMRC, $65.27) “A Cleaner Future” by Drew Kolz

 Ameresco Inc. Class A (AMRC, $65.27) “A Cleaner Future” Still a Hold 

By: Drew Kolz, AIM Student at Marquette University

Disclosure: The AIM Equity Fund currently holds this position. This article was written by myself, and it expresses my own opinions. I am not receiving compensation for it and I have no business relationship with any company whose stock is mentioned in this article.

Summary

·       Ameresco Inc. Class A (NYSE:AMRC) engages in the provision of comprehensive energy efficiency and renewable energy solutions for businesses throughout North America and Europe.

·       Ameresco has reached a total addressable global market of more than $150B in 2021.

·       There is a strong vision for the future with over $2.2B in project backlogs and $1.1B in O&M backlog.

·       Earnings forecasts continue to rise with growing higher margin recurring lines of business.

·       Ameresco will continue to grow from the Biden Administration investing resources into renewable energy sources.

 

Key Points: As the demand for renewable energy sources continue to rise, so does Ameresco’s total addressable global market. Sitting at $150B in 2021, Ameresco still has room to grow. Since 2017 the company has seen a steady increase in the total addressable global market. Furthermore, management expects that number to be reach over $250B by 2026.

 Looking forward, Ameresco has several projects already lined up that will bring in great revenue for the company in the near future. With over $2.2B in project backlogs and $1.1B in O&M backlog, Ameresco will continue to grow as these projects are completed. In fact, Ameresco is already in a sound place financially with 70% of EBITDA in 2020 coming from recurring lines of lines of business.

Earnings forecasts surrounding Ameresco continue to trend upwards. As recurring lines of business continue to increase their margins, Ameresco excepts to continue to see a rise in their earnings. Furthermore, as the leading independent provider in the United States for renewable energy and comprehensive energy efficiency, Biden’s plan to invest in renewable energy companies should benefit this company.

 What has the stock done lately?

Over the past 3 months, Ameresco has generated a 57.10% return. In fact, Ameresco just recently reached their 52-week high of $65.46 to start the month of February. Despite reaching this high, the company is exhibiting no signs of slowing down. As Ameresco’s market continues to grow, so should their stock price.

 

                                                                        Source: FactSet

Past Year Performance:

Source: FactSet

My Takeaway:

Ameresco was added to the AIM portfolio at a price of $15.77 and is now trading at $65.27, a return of over 320%. While this stock has already well exceeded expectations, I believe that Ameresco still has room to grow. With a backlog of projects on the books, Ameresco has a steady source of revenue for years to come. Furthermore, as the Biden Administration continues to dump resources towards renewable energy, Ameresco will be one the first companies called upon. Finally, as earnings forecasts continue to be positive, the stock shall continue to rise. For these reasons, I believe that Ameresco should be held by the AIM portfolio.