Why Renewable Energy Company Ameresco's Shares Are Diving Today

Ameresco Inc AMRC shares are trading lower by around 19% after the company reported worse-than-expected Q3 FY23 results.

The company reported revenue of $335.1 million, missing the consensus of $385.2 million. Revenue came below the company's guidance as Projects business faced supply chain headwinds and delays in contract conversions.

Energy Asset revenue rose 6.2% Y/Y, aided by continued growth in operating assets and stronger RIN prices. O&M revenue grew 4.2% Y/Y on consistent growth in long-term contracts. 

Adjusted EBITDA stood at $43.3 million vs. $57.9 million a year ago. 

Adjusted EPS of $0.40, missing the consensus of $0.46.

As of September 30, 2023, the total project backlog stood at $3.7 billion. 

The company increased the net assets in development by 51 MW in Q3, mainly led by the acquisition of the Los Alamitos solar and battery microgrid project as part of the staged acquisition of Bright Canyon Energy.

Outlook: AMRC lowered FY23 outlook for revenue to $1.315 billion-$1.370 billion (from $1.45 billion-$1.55 billion) vs. $1.53 billion street view, adjusted EBITDA of $160 million-$170 million (from $210 million-$220 million), and adjusted EPS of $1.15-$1.25 (from $1.80-$1.90) vs. consensus of $1.81.

The outlook is adjusted to reflect the industry issues that continue to impact the company's business, such as project conversion and asset construction pushouts.

The company now expects FY24 adjusted EBITDA to be around $250 million.

The company now expects to place between 120 and 130 MWe of energy assets in service for 2023, including the 31.5MW solar + 20MW battery Los Alamitos microgrid project and the second 5MWe RNG plant. 

AMRC now projects the third RNG plant to be at mechanical completion by the end of the year and fully commissioned in early 2024.

Also Read: Ameresco Wins Generation 4 Contract From Department Of Energy

Price Action: AMRC shares are down 19% at $21.55 premarket on the last check Tuesday.