On Monday, B.Riley adjusted its outlook on Altus Power (NYSE:AMPS) shares, reducing the price target to $7.00 from the previous $10.00 but continuing to endorse the stock with a Buy rating.
The adjustment follows Altus Power's announcement of its 2024 guidance, projecting revenue between $200-222 million and EBITDA in the range of $115-135 million. Despite a challenging fourth quarter and slower-than-anticipated execution, the growth narrative for Altus Power is still considered viable.
Altus Power's guidance is seen as conservative by the firm, suggesting there could be room for better performance. The company's EBITDA is expected to grow approximately 24-45% in 2024. This outlook is based on the company's existing portfolio and anticipated additions, which provide a clear view of its potential.
The company has faced some delays in community solar projects, and there might be further schedule shifts in 2024, depending on the timing of implementation. Nonetheless, the firm remains confident in the robust EBITDA growth forecast for Altus Power.
The financial position of Altus Power is considered strong, with the company not foreseeing the need for equity capital to support its growth initiatives. Altus plans to leverage its cash reserves, debt facilities, and tax equity partnerships for expansion and strategic pursuits. In March 2024, Altus Power secured a $101 million term loan for the purchase of solar assets from Vitol Solar, further underlining its solid liquidity status.
B.Riley also highlights the strategic relationships of Altus Power with CBRE and Blackstone (NYSE:BX) as significant competitive advantages. These partnerships are expected to contribute to the company's growth trajectory in the coming year.
The firm anticipates that the upcoming Investor Day in May will be a pivotal event for Altus Power, potentially more influential than the first-quarter earnings in clarifying the company's long-term strategy and growth plans to investors.
InvestingPro Insights
In light of B.Riley's recent assessment of Altus Power and the company's forward-looking guidance, certain metrics from InvestingPro offer additional context to investors. Altus Power's significant gross profit margin is reflected in the data, with a robust 80.9% reported for the last twelve months as of Q4 2023. This aligns with the company's conservative revenue projection for 2024, indicating a strong underlying profitability that may support future growth.
Moreover, analysts following Altus Power anticipate sales growth in the current year, which is consistent with the company's guidance. The InvestingPro data also reveals a compelling revenue growth of 53.38% for the last twelve months as of Q4 2023, underscoring the company's ability to expand its top line effectively.
Despite the challenges faced in the past quarter, Altus Power's stock is currently trading near its 52-week low, which, according to one of the InvestingPro Tips, suggests that the stock might be undervalued. This could present an opportunity for investors, especially considering that the company's liquid assets exceed its short-term obligations, indicating financial stability.
For those looking to delve deeper into Altus Power's financial health and stock performance, InvestingPro offers additional insights. There are 11 more InvestingPro Tips available that could further inform investment decisions. To access these tips and comprehensive analysis, investors can visit https://www.investing.com/pro/AMPS and use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.