Should you buy Ameresco (AMRC)?
Updated
The stock has reached a technically oversold extreme—RSI at 28, below all moving averages in a death cross formation—while analyst consensus implies approximately 52% upside, but free cash flow is deeply negative at a magnitude equivalent to nearly 700% of reported earnings, business quality sits well below the 4.0 minimum threshold, and the most recent quarter produced an earnings miss; the 200-day average continues to slope upward at roughly 5.5% over thirty days, leaving open the possibility this is a pullback within a longer-term uptrend, though the quality and momentum concerns dominate today.
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Engine methodology range
Range computation requires sufficient peer-comparable data; available for tickers with peer_count ≥3.
What the engine is tracking
| Pillar | Expectation | Trend |
|---|---|---|
Free cash flow is deeply negative—flagged as a red flag at a magnitude equivalent to approximately 700% of reported net income—meaning the business is consuming far more cash than its income statement implies, a dislocation compounded by a Piotroski F-Score of 3 out of 9 and no demonstrable competitive moat, placing quality well below the 4.0 minimum investment-grade threshold. Quality breakdown | FCF/NI ratio recovering to less negative than -100% for 2 consecutive quarters would indicate the gap between reported earnings and actual cash generation is beginning to close. | →Stable |
| CounterThree of the four prior quarters produced earnings beats, suggesting the accrual-based income stream is broadly tracking expectations; if cash collection improves, the mismatch between reported income and free cash flow may narrow as the business scales. | ||
RSI has dropped to 28—deeply oversold territory—below all moving averages in a death cross formation with bearish MACD, indicating capitulation risk; however, the 200-day moving average itself continues to slope upward at approximately 5.5% over thirty days, leaving open the possibility this is a temporary pullback within a longer-term uptrend rather than a confirmed breakdown. Momentum breakdown | RSI recovering above 40 and price reclaiming the 200-day moving average for 3 consecutive weeks would confirm the pullback has run its course. | →Stable |
| CounterDeath crosses, bearish MACD, and RSI at 28 with no reversal signal yet suggest price may overshoot further to the downside before a recovery; the rising slope of the 200-day average provides directional support but does not set an immediate price floor. | ||
The analyst consensus prices the stock approximately 52% above its current level, and the risk/reward structure shows approximately 32.6% headroom to the consensus-derived target—a meaningful potential recovery for investors with the risk tolerance to hold through the current technical distress. Sentiment breakdown | Analyst target upgrades or new initiations sustaining consensus upside above 52% over the next two quarters would validate that the sell-side thesis is intact. | →Stable |
| CounterCoverage is light, which reduces the statistical weight of the consensus; a small number of optimistic participants may not reflect broader institutional conviction, and the 52% target may prove aspirational if the FCF deficit and earnings miss signal worsening fundamentals. | ||
Free cash flow is deeply negative—flagged as a red flag at a magnitude equivalent to approximately 700% of reported net income—meaning the business is consuming far more cash than its income statement implies, a dislocation compounded by a Piotroski F-Score of 3 out of 9 and no demonstrable competitive moat, placing quality well below the 4.0 minimum investment-grade threshold.
→Stable- Expectation
- FCF/NI ratio recovering to less negative than -100% for 2 consecutive quarters would indicate the gap between reported earnings and actual cash generation is beginning to close.
CounterThree of the four prior quarters produced earnings beats, suggesting the accrual-based income stream is broadly tracking expectations; if cash collection improves, the mismatch between reported income and free cash flow may narrow as the business scales.
RSI has dropped to 28—deeply oversold territory—below all moving averages in a death cross formation with bearish MACD, indicating capitulation risk; however, the 200-day moving average itself continues to slope upward at approximately 5.5% over thirty days, leaving open the possibility this is a temporary pullback within a longer-term uptrend rather than a confirmed breakdown.
→Stable- Expectation
- RSI recovering above 40 and price reclaiming the 200-day moving average for 3 consecutive weeks would confirm the pullback has run its course.
CounterDeath crosses, bearish MACD, and RSI at 28 with no reversal signal yet suggest price may overshoot further to the downside before a recovery; the rising slope of the 200-day average provides directional support but does not set an immediate price floor.
The analyst consensus prices the stock approximately 52% above its current level, and the risk/reward structure shows approximately 32.6% headroom to the consensus-derived target—a meaningful potential recovery for investors with the risk tolerance to hold through the current technical distress.
→Stable- Expectation
- Analyst target upgrades or new initiations sustaining consensus upside above 52% over the next two quarters would validate that the sell-side thesis is intact.
CounterCoverage is light, which reduces the statistical weight of the consensus; a small number of optimistic participants may not reflect broader institutional conviction, and the 52% target may prove aspirational if the FCF deficit and earnings miss signal worsening fundamentals.
▸ Show 1 more pillar▾ Show fewer
Following three consecutive positive quarters—including a 274% beat in the oldest of those periods—the most recent quarter produced a miss of approximately 14%, breaking the established cadence and raising questions about near-term execution consistency.
→Stable- Expectation
- A return to a positive earnings surprise in the next reporting cycle would re-establish credibility; a second consecutive miss would confirm the trend reversal is more than a one-off.
CounterThree quarters of beats before the most recent miss suggests execution discipline has generally been intact; a single miss following a string of outsized beats is consistent with the bar having been raised, not necessarily with operational deterioration.
→ Full pillar scorecard with all 4 pillars + per-dimension breakdown
When this thesis breaks
Falsifiable conditions per pillar — any one trip warrants review independent of price action. Engine-derived; not personalized advice.
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Free cash flow is deeply negative—flagged as a red flag at a magnitude equivalent to approximately 700% of reported net income—meaning the business is consuming far more cash than its income statement implies, a dislocation compounded by a Piotroski F-Score of 3 out of 9 and no demonstrable competitive moat, placing quality well below the 4.0 minimum investment-grade threshold.
Trip ifFree cash flow turns positive (FCF/NI ratio rises above 0%) for 2 consecutive quarters.
- P2RSI has dropped to 28—deeply oversold territory—below all moving averages in a death cross formation with bearish MACD, indicating capitulation risk; however, the 200-day moving average itself continues to slope upward at approximately 5.5% over thirty days, leaving open the possibility this is a temporary pullback within a longer-term uptrend rather than a confirmed breakdown.
Trip ifRSI recovers above 40 and price closes above the 200-day moving average for 3 consecutive weeks.
- P3The analyst consensus prices the stock approximately 52% above its current level, and the risk/reward structure shows approximately 32.6% headroom to the consensus-derived target—a meaningful potential recovery for investors with the risk tolerance to hold through the current technical distress.
Trip ifAnalyst consensus upside falls below 15% from the current 52% for 2 consecutive quarters.
- P4Following three consecutive positive quarters—including a 274% beat in the oldest of those periods—the most recent quarter produced a miss of approximately 14%, breaking the established cadence and raising questions about near-term execution consistency.
Trip ifEPS surprise returns above 0% for 2 consecutive quarters.
How the engine reached this verdict
TrendMatrix's engine output for Ameresco, Inc. (AMRC) is SELL_IF_HOLDING with medium conviction, score 4.3/10 at $28.16. An L1 hard-floor gate blocked the positive-verdict path — Quality below minimum threshold. Co-failing gates ( MOMENTUM:1.5<4.5) reinforce the read; dimensional pillars cannot lift the engine output above the verdict floor while the L1 gate is active.
The dominant failed gate is momentum at 1.5 vs threshold 4.5. SELL flips back toward HOLD if momentum recovers above its threshold AND a co-failing gate also clears. The strongest-cleared gate today is ASYMMETRY:2.2>=1.5.
On the bear side: Quality below floor (2.0 < 4.0). Active engine warnings: Quality below floor (2.0 < 4.0), V9 Gate Failed: MOMENTUM:1.5<4.5.
The engine's exit framework anchors to a tactical sell band near $28.16, with structural invalidation at $26.30. The asymmetric R:R against a reversal hypothesis is 4.57 — the upside scenario exists, but it requires multiple structural gates to flip; the downside scenario requires only one more disappointment. The engine's sizing output: 0.5% of portfolio at this asymmetry level (none-conviction tier).
For the full 10-dimension breakdown + V9 gate detail: Why TrendMatrix rates AMRC — 10-dimension breakdown →
Bear case
- ▸Quality below floor (2.0 < 4.0)