On Wednesday, B.Riley adjusted its financial outlook for Altus Power (NYSE:AMPS) shares, a company specializing in commercial and industrial solar solutions. The firm decreased the price target to $6.00 from the previous $7.00, while still affirming a Buy rating for the stock.
The revision follows Altus Power's inaugural Analyst Day, where the company presented its strategic plans and financial forecasts through 2026.
Altus Power's projections indicated a more moderate growth trajectory than B.Riley had initially predicted, with revenue and EBITDA compound annual growth rates (CAGRs) expected to range between 20-25%. This is a reduction from the roughly 30-40% CAGRs previously estimated for 2024 and 2025.
The updated guidance suggests Altus Power anticipates revenues between $270-305 million and an adjusted EBITDA of $160-180 million for the year 2026.
These figures are slightly below B.Riley's former estimates for 2025, which had not been revised post Altus Power's first-quarter earnings call last week. During that call, the company discussed reviewing its development pipeline.
B.Riley's analysis suggests that Altus Power might be adopting a conservative stance regarding its development pipeline's potential, particularly beyond its current high-visibility partnerships, including those with CBRE.
The firm anticipates that following the completion of the pipeline review in the coming quarters, Altus Power may offer more details on possible development opportunities for the years 2025-2026, which could enhance the company's growth prospects.
In summary, despite the reduction in the price target, B.Riley remains optimistic about Altus Power's long-term growth opportunities, citing the company's strong market position and the macroeconomic factors favoring the solar industry.
InvestingPro Insights
Altus Power's current market dynamics, according to InvestingPro data, reveal a mixed financial landscape. The company boasts a robust gross profit margin of 79.22% for the last twelve months as of Q1 2024, indicating efficient cost management relative to its revenue, which aligns with the company's strategic plans discussed during their Analyst Day. Additionally, revenue growth remains strong, with a significant 49.49% increase in the last twelve months as of Q1 2024, supporting B.Riley's optimistic view on the company's long-term growth potential.
However, the market has reacted to Altus Power's recent developments with notable price volatility. The stock has experienced a sharp decline of 41.95% over the last three months, suggesting investor concerns or market adjustments. Yet, analysts contributing to InvestingPro Tips believe that the company's net income is expected to grow this year, providing a potential upside for investors. It's also worth noting that Altus Power does not pay a dividend, which may influence investment decisions for income-seeking shareholders.
For readers looking to delve deeper into Altus Power's prospects, there are additional 12 InvestingPro Tips available, which can be explored to better understand the company's financial health and market position. Use coupon code PRONEWS24 to get an extra 10% off a yearly or biyearly Pro and Pro+ subscription, and gain access to these valuable insights.
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