Zeo Energy (NASDAQ:ZEO) and Ameresco (NYSE:AMRC) Critical Contrast

Zeo Energy (NASDAQ:ZEO) and Ameresco (NYSE:AMRC) are both small-cap energy companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, earnings, risk, valuation, profitability and analyst recommendations.

Earnings and Valuation

This table compares Zeo Energy and Ameresco”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zeo Energy	$69.35 million	0.72	-$14.01 million	($0.37)	-2.34
Ameresco	$1.93 billion	0.90	$44.28 million	$0.58	56.45

Ameresco has higher revenue and earnings than Zeo Energy. Zeo Energy is trading at a lower price-to-earnings ratio than Ameresco, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Zeo Energy has a beta of 0.62, suggesting that its stock price is 38% less volatile than the S&P 500. Comparatively, Ameresco has a beta of 2.58, suggesting that its stock price is 158% more volatile than the S&P 500.

Insider & Institutional Ownership

99.2% of Ameresco shares are owned by institutional investors. 56.2% of Zeo Energy shares are owned by company insiders. Comparatively, 45.1% of Ameresco shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Zeo Energy and Ameresco’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zeo Energy	-15.13%	N/A	-20.46%
Ameresco	1.59%	3.33%	0.82%

Analyst Recommendations

This is a breakdown of current ratings for Zeo Energy and Ameresco, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zeo Energy	1	0	0	0	1.00
Ameresco	2	4	7	0	2.38

Ameresco has a consensus target price of $42.56, indicating a potential upside of 29.97%. Given Ameresco’s stronger consensus rating and higher possible upside, analysts clearly believe Ameresco is more favorable than Zeo Energy.

Summary

Ameresco beats Zeo Energy on 13 of the 14 factors compared between the two stocks.

About Zeo Energy

Zeo Energy Corp. provides residential solar energy systems, other energy efficient equipment, and related services in Florida, Texas, Arkansas, and Missouri, the United States. The company is involved in the selling and installing of residential solar energy systems that homeowners use electricity required to power their homes. Its residential solar energy systems comprise solar panels, inverters, and racking systems. It also offers insulation services, such as adding insulation to a home's attic or walls; energy efficiency equipment, including hybrid electric water heaters and swimming pool pumps; battery-based energy storage systems; and roofing services. Zeo Energy Corp. was founded in 2005 and is headquartered in New Port Richey, Florida.

About Ameresco

Ameresco, Inc., a clean technology integrator, provides a portfolio of energy efficiency and renewable energy supply solutions in the United States, Canada, Europe, and internationally. It operates through U.S. Regions, U.S. Federal, Canada, Europe, Alternative Fuels, and All Other segments. The company offers energy efficiency, infrastructure upgrades, energy security and resilience, asset sustainability, and renewable energy solutions for businesses and organizations. It designs, develops, engineers, and installs projects that reduce the energy, as well as operations and maintenance (O&M) costs of its customers' facilities; and projects primarily include various measures customized for the facility and designed to enhance the efficiency of building systems, such as heating, ventilation, cooling, and lighting systems. In addition, the company offers renewable energy solutions and services, such as the construction of small-scale plants that the company owns or develops for customers that produce electricity, gas, heat, or cooling from renewable sources of energy and O&M services; and electricity, processed renewable gas fuel, and heat or cooling produced from renewable sources of energy. Further, the company sells photovoltaic (PV) solar energy products and systems, as well as provides consulting, and enterprise energy management services; and operates wind farms. It serves the federal, state, local governments, healthcare and educational institutions, airports, public housing authorities and public universities, municipal utilities, and commercial and industrial customers. As of December 31, 2023, the company owned and operated 185 small-scale renewable energy plants and solar PV installations. Ameresco, Inc. was incorporated in 2000 and is headquartered in Framingham, Massachusetts.