Why Ameresco's Shares Plunged

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of energy efficiency company Ameresco (NYSE: AMRC  ) fell as much as 20% today, after reporting third quarter results.

So what: Revenue fell 28.1% from a year ago to $163.9 million, and was far below the $196 million mark that analysts expected. Earnings per share of $0.15 were $0.08 below estimates, and the company also lowered guidance for the rest of the year.

Now what: Management blamed a lengthening of backlog conversion times due to customer uncertainty as having a big impact on the second half of 2012. Results are expected to improve as the political environment becomes clearer after the election.

The third quarter wasn't good in any way for Ameresco, but I wouldn't take the stock off my watchlist entirely. Even lower guidance puts the company's P/E ratio around 20 and, if demand picks up after the fiscal cliff and other urgent political matters are resolved, the company could return to solid profitability. I'm not a buyer today, but further dips in the stock may be an opportunity to buy for long-term investors.

Interested in more info on Ameresco? Add it to your watchlist by clicking here.

 

Read/Post Comments (4) | Recommend This Article (0)

Comments from our Foolish Readers

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  • Report this Comment On November 08, 2012, at 5:49 PM, rsound12 wrote:

    This is MF's "Only Energy Stock You'll Ever Need".

    Thanks for the tip.

  • Report this Comment On November 10, 2012, at 5:09 PM, tedwarrenlives wrote:

    Doesn't sound like a compelling "buy" shares at a low price while you can!!

    This was the Motley Fool's "the energy play for the rest of your life" mass e-mail attack?

    Dave and Tom Gardner you men need to stop putting title's like that together for a ticker and company followed by a dip in the pps come out with an article showing such "weak conviction".

    From this article it seems like "the energy play for the rest of your life" was never really that?

    Next time the mass e-mailing title for a company like AMRC should be, "a energy company with potential"?

  • Report this Comment On November 13, 2012, at 9:21 PM, 8bravo wrote:

    yeah there was a time when I was a silly believer, just about to start learning about investing. Following the MF's suggestions of CLNE and AMRC are the worst performers of my entire portfolio. Everything else I bought afterwards, without any tips from the SA ideas, is doing great. I hate myself for having ever signed up to the stock adviser!

  • Report this Comment On December 27, 2012, at 1:49 PM, onemojoman wrote:

    Agree with all above. My AMRC is down 33% and is the worst dog in my portfolio. Should have paid attention months ago when I checked with an "insider sales" tracking service and saw the execs lightening up on their own shares.

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