What happened
Markets are moving south today, but shares of Ameresco (AMRC 1.19%) are headed in the opposite direction. Investors are celebrating the leader in energy-efficiency solutions after it reported strong first-quarter 2023 earnings. And that's not all. Some positive commentary from analysts is giving investors an additional reason to click the buy button.
As of 11:33 a.m. ET, shares of Ameresco are up 11.4%, having retreated from their earlier rise of 16.8%.
So what
Beating analysts' top-line estimate of $232 million, Ameresco reported Q1 2023 sales of $271 million. Ameresco's Q1 2023 revenue was approximately $40 million higher than its guidance and largely driven by "faster execution on certain projects, as well as some early contract conversions," according to management.
The second quarter of 2023 is also shaping up to be a success. Ameresco reported a backlog of $2.97 billion as of March 31, 2023, representing a 13% quarter-over-quarter increase.
The company won't have to wait long to see the backlog convert to actual sales. Management stated that it expects to "convert a substantial dollar amount of awarded backlog to contracted backlog during the second quarter." The company identifies contracted backlog as revenue that it expects to recognize in the next 12 months.
Seeing ample upside to the stock, UBS analyst William Grippin initiated coverage on Ameresco with a buy rating and set a $60 price target, which implies an upside of 47% from yesterday's closing price. Noah Kaye, an analyst at Oppenheimer, has an even more bullish opinion, setting a price target of $65.
Now what
Shares of Ameresco are paring back some of the 22% loss that they suffered through the first four months of 2022, and some analysts expect the stock to continue rising. It's important for investors to take these price targets with a grain of salt since analysts often have short-term investing horizons.
