• Wondering if Ameresco at around US$33.03 is still offering value after a strong run, or if you are arriving late to the story.
• The stock has posted returns of 10.2% over the past week, 27.7% over the past month, 7.7% year to date and 120.8% over the past year, while the 3 year and 5 year periods show declines of 23.6% and 36.7%.
• Recent price moves sit against a backdrop of ongoing attention on clean energy infrastructure companies and investor interest in how these businesses are positioned within the wider power grid and sustainability themes. For Ameresco, this context helps explain why the stock can experience sharp swings as sentiment around energy transition spending and project pipelines shifts.
• Despite the strong 1 year return, Ameresco currently records a valuation score of 0 out of 6. The rest of this article will walk through the main valuation methods used for the stock and then finish with a different way to think about what that score really means for you.

Ameresco scores just 0/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Ameresco Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow model takes projections of a company’s future cash flows and discounts them back to today to estimate what the business might be worth right now.

For Ameresco, the latest twelve month Free Cash Flow is reported as a loss of $530.6 million. Analysts and internal estimates then project the company to reach Free Cash Flow of $182 million by 2030, with interim annual figures stepping up from $86.8 million in 2026 to $221.2 million in 2035. Simply Wall St uses a 2 Stage Free Cash Flow to Equity model, where the first years rely on analyst inputs and later years are extrapolated using modest growth assumptions.

When all these projected cash flows are discounted back to today and divided by the number of shares, the model arrives at an estimated intrinsic value of about $30.67 per share. Compared with the recent share price of around $33.03, this implies Ameresco is roughly 7.7% overvalued, which is a relatively small gap rather than a clear mismatch.

Result: ABOUT RIGHT

Ameresco is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.

Approach 2: Ameresco Price vs Earnings

For a profitable company, the P/E ratio is a useful way to think about what you are paying for each dollar of current earnings. A higher P/E usually reflects higher growth expectations or lower perceived risk, while a lower P/E can point to more modest growth expectations or higher perceived risk.

Ameresco currently trades on a P/E of 55.78x. That sits slightly above the Construction industry average P/E of 51.29x and close to the peer average of 51.88x. Simply Wall St also calculates a “Fair Ratio” for the stock of 52.05x. This Fair Ratio is a proprietary estimate of what P/E might be reasonable, given factors such as Ameresco’s earnings growth profile, industry, profit margins, market cap and specific risks.

This Fair Ratio can be more useful than a simple comparison with peers or the industry because it adjusts for company level characteristics instead of assuming one size fits all. Set against the current P/E of 55.78x, Ameresco screens as somewhat expensive relative to that Fair Ratio, suggesting the stock is slightly overvalued on this metric.

Result: OVERVALUED

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Upgrade Your Decision Making: Choose your Ameresco Narrative

Earlier it was mentioned that there is an even better way to understand valuation. Meet Narratives, a simple tool on Simply Wall St's Community page that lets you connect your story about Ameresco to a set of forecasts and a Fair Value, then compare that Fair Value to the current price to decide if the stock looks attractive, fully priced or expensive based on your own view of future revenue, earnings and margins.

A Narrative is essentially your storyline behind the numbers. It is where you spell out why you think, for example, Ameresco could be worth closer to US$62.00 if you lean toward the more optimistic assumptions on revenue growth, margins and a P/E of 36.4x in 2029, or nearer to US$28.00 if you align with the more cautious view that uses lower growth, different margin expectations and a P/E of 19.2x instead.

Because Narratives on the platform are updated when new information such as earnings, guidance or news hits, you are not locked into a static view. You can quickly see how fresh data shifts the implied Fair Value range for Ameresco compared with the live share price, helping you decide whether your existing position, a potential entry or an exit still fits your chosen story.

For Ameresco however we'll make it really easy for you with previews of two leading Ameresco Narratives:

Fair value in this bullish narrative: US$62.00 per share.

Current price of about US$33.03 sits roughly 46.7% below that fair value estimate, so the stock would need a large move higher to close that gap if those assumptions play out.

Revenue growth assumption: 11.68% a year.

• Backlog, higher margin international work and energy infrastructure projects are central to the earnings story, with an emphasis on improving gross margins and a stronger earnings mix over time.
• Recurring revenue from clean energy assets, especially battery storage and renewable natural gas, is expected to improve visibility on cash flows and support a higher quality earnings base.
• The fair value hinges on Ameresco reaching US$2.8b of revenue and US$130.8m of earnings by 2029 and trading on a 36.4x P/E, with investors weighing that against financing, policy and competitive risks.

Fair value in this cautious narrative: US$28.00 per share.

Current price of about US$33.03 sits roughly 18.0% above that fair value estimate, so the stock would need to fall to close the gap if those assumptions prove closer to reality.

Revenue growth assumption: 9.50% a year.

• Higher financing costs, policy uncertainty and supply chain pressures are key concerns for project demand, cost control and the stability of long term earnings.
• Customer concentration and rising competition from larger industry players are flagged as risks for future contract wins, margins and return on capital.
• This view assumes Ameresco reaches US$2.5b of revenue and US$111.3m of earnings by 2029 and trades on a 19.2x P/E, leading to a fair value close to the lower end of the current analyst target range.

Do you think there's more to the story for Ameresco? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.