ANNAPOLIS, Md. & NEW YORK--(BUSINESS WIRE)--HA Sustainable Infrastructure Capital, Inc. ("HASI†) (NYSE: HASI), a leading investor in sustainable infrastructure assets, and KKR, a leading global investment firm, today announced that HASI and KKR have agreed to make an additional capital commitment of $500 million each for a combined total of $1 billion of new investment capacity into CarbonCount Holdings 1 LLC ("CCH1†). The co-investment vehicle was established by HASI and KKR to provide long-te. ...

Core Viewpoint - HASI's valuation has become more attractive due to improved book value and a decrease in market price since the previous sell thesis in 2022 [1] Group 1: Financial Metrics and Performance - HASI's long-term financial metrics, including EBITDA and earnings per share, show a positive upward trend despite lumpiness [5][12] - The company has been issuing equity, which influences EBITDA growth but raises questions about per-share profitability [8] - The streak of dividend raises indicates a well-supported payout, with book value per share climbing nicely [16][20] Group 2: Complexity of Investment Structures - HASI operates through complex investment structures, including VIEs and off-balance sheet vehicles, making it challenging to assess true economic returns [2][4] - Financial engineering can obscure the actual performance of investments, necessitating a focus on long-term metrics rather than quarterly fluctuations [3][16] - The company’s investments yield high ROEs, with a reported 13.4% ROE on 2025 investments, raising questions about whether this is due to financial engineering or genuine advantages [24][26][37] Group 3: Management and Fee Structures - HASI's recent $1.2 billion investment in a utility-scale renewable project involves a joint venture with KKR, managed through its CCH1 vehicle, which generates a significant fee stream for the company [39][41] - The management fee structure allows HASI to achieve a higher true ROE than typical energy infrastructure projects, contributing positively to long-term returns [42][46] - The annual fee income of $22 million translates to $0.17 per share, providing additional returns beyond the normal economic return [45] Group 4: Investment Outlook - Despite the complexity of its investment structures, HASI's healthy long-term financial metrics and the advantages from its fee streams suggest a bullish outlook for the company [47]

Core Viewpoint - HA Sustainable Infrastructure Capital, Inc. has successfully priced a public offering of $500 million in green junior subordinated notes, reflecting its commitment to sustainable infrastructure investment [1] Company Summary - The company is a leading investor in sustainable infrastructure assets [1] - The offering consists of 8.000% green junior subordinated notes due in 2056 [1] - The notes will be guaranteed on a subordinated basis by Hannon Armstrong Sustainable Infrastructure [1]

Core Insights - The article discusses the top 9 undervalued asset management stocks to buy, highlighting the resilience of wealth management and brokerage stocks amid economic uncertainties [1] - The asset management sector has seen a rebound, with global assets under management reaching a record high of $147 trillion by the end of June [2] - Private credit is emerging as a significant trend in asset management, with non-bank institutions reshaping capital investment [3][4] Industry Overview - The asset management sector is characterized by a robust US economy and accommodative monetary policies, which have supported its resilience despite uncertainties [1] - Global private credit markets are projected to grow rapidly, potentially reaching $3 trillion by 2028, driven by lower interest rates and economic strength in the US and Europe [4] Investment Opportunities - Analysts at Goldman Sachs suggest that the current challenges faced by alternative asset manager stocks present opportunities for investment in undervalued names [5] - A methodology was employed to identify undervalued asset management stocks, focusing on companies with a price-to-earnings ratio of less than 20 and an upside potential of over 20% [7] Company Highlights - HA Sustainable Infrastructure Capital (NYSE:HASI) shows a stock upside potential of 42.42% with a forward price-to-earnings ratio of 10.74, supported by strong third-quarter results and a significant investment pipeline [9][10][12] - Burford Capital (NYSE:BUR) has a stock upside potential of 121.94% despite disappointing third-quarter results, with a focus on growing its platform and securing new firm commitments [13][14][15][17]

Core Insights - HA Sustainable Infrastructure Capital (HASI) reported Q3 CY2025 results that exceeded Wall Street's revenue expectations, with sales increasing by 51.5% year-on-year to $139.2 million and a non-GAAP profit of $0.80 per share, which was 16.1% above analysts' consensus estimates [1][6]. Financial Performance - Revenue reached $139.2 million, surpassing analyst estimates of $87.86 million, reflecting a 51.5% year-on-year growth and a 58.5% beat [6]. - Adjusted EPS was $0.80 compared to analyst estimates of $0.69, marking a 16.1% beat [6]. - Adjusted EBITDA stood at $105.1 million, exceeding analyst estimates of $76.86 million, with a margin of 75.5%, representing a 36.8% beat [6]. - The operating margin was -3.7%, consistent with the same quarter last year [6]. - Market capitalization was reported at $3.54 billion [6]. Investment Activity - Management closed over $650 million in new transactions during the quarter, projecting to close more than $3 billion for the full year 2025, indicating a more than 30% year-over-year increase [7]. - The refinancing of asset-backed securities within the SunStrong residential solar lease portfolio generated significant cash distribution, contributing to earnings for the quarter [7]. - A notable $1.2 billion structured equity investment was completed in the SunZia wind project, showcasing the company's ability to engage in larger transactions due to enhanced access to capital [7]. Future Outlook - Management anticipates investment volumes to exceed last year's by over 30%, supported by a pipeline exceeding $6 billion [4]. - The company aims for 8–10% annual EPS growth through 2027 while managing interest rate risks [4]. - New asset yields have remained above 10.5% for six consecutive quarters, with a diversified pipeline across various renewable sectors [8]. Risk and Capital Management - HASI maintained a low realized loss rate of under 10 basis points annually and stabilized its cost of debt despite refinancing activities [8]. - The company added $250 million in hedges to mitigate future interest rate exposure and reported $1.1 billion in liquidity at the end of the quarter [8].

Portfolio Overview - As of September 30, 2025, the company's Portfolio totaled approximately $7.5 billion, including $3.7 billion in Behind-the-Meter (BTM) assets, $2.8 billion in Grid-Connected (GC) assets, and $1.0 billion in Fuels, Transport, and Nature (FTN) assets[208]. - The company's pipeline of potential new opportunities as of September 30, 2025, consisted of more than $6.0 billion, with approximately 39% related to BTM assets, 38% to GC assets, and 18% to FTN assets[203]. - Approximately 53% of the Portfolio consisted of equity method investments in renewable energy-related projects, while 37% consisted of fixed-rate receivables and debt securities[208]. - The average size of transactions in the Portfolio was approximately $11 million, with a weighted average remaining life of about 16 years[208]. - The GAAP-based Portfolio increased to $7.542 billion as of September 30, 2025, compared to $6.594 billion as of December 31, 2024, reflecting a growth of 14.4%[235]. Financial Performance - The company completed approximately $649 million and $1.5 billion of transactions during the three and nine months ended September 30, 2025, respectively, compared to approximately $396 million and $1.2 billion during the same periods in 2024[200]. - Total revenue for Q3 2025 reached $103.064 million, a 26% increase from $81.965 million in Q3 2024[215]. - Net income for Q3 2025 was $84.906 million, a significant increase of $104.082 million compared to a net loss of $19.176 million in Q3 2024[216]. - For the nine months ended September 30, 2025, total revenue was $285.690 million, a slight increase of 1% from $282.298 million in the same period of 2024[217]. - Net income for the nine months ended September 30, 2025, was $242.886 million, an increase of $110.570 million or 84% compared to $132.316 million in 2024[217]. Income and Expenses - Interest and rental income for Q3 2025 increased to $68.976 million, up 8% from $64.151 million in Q3 2024[215]. - Interest expense rose to $71.481 million in Q3 2025, reflecting a 20% increase from $59.401 million in Q3 2024[215]. - The average cost of debt for Q3 2025 was 5.9%, compared to 5.6% in Q3 2024[215]. - Adjusted Earnings for Q3 2025 were $102.5 million, or $0.80 per share, up from $62.6 million, or $0.52 per share in Q3 2024[228]. - The company reported a return of capital of $25 million in Q3 2025, compared to $6 million in Q3 2024[226]. Cash Flow and Liquidity - Cash collected in Q3 2025 was $93 million, significantly higher than $32 million in Q3 2024[226]. - The total cash collected for the nine months ended September 30, 2025, was $187 million, compared to $67 million in the same period of 2024[226]. - Total liquidity available as of September 30, 2025, was $1.136 billion, consisting of $302 million in unrestricted cash and $804 million in unused capacity under the unsecured revolving credit facility[250]. - Cash provided by financing activities for the nine months ended September 30, 2025, was $759 million, significantly higher than the $(89) million reported for the same period in 2024[271]. - Cash used in investing activities decreased by $565 million compared to the same period in 2024, with increased investments in equity method investments and receivables[270]. Debt and Financing - The company has a strategic partnership with KKR for joint investments in eligible projects, enhancing its investment capabilities[202]. - The company entered into a delayed-draw term loan facility of up to $250 million, available from March 16, 2026, to June 15, 2026, with a maturity date of June 15, 2028[252]. - As of September 30, 2025, the company's long-term recourse debt obligations totaled $5.189 billion, with a debt-to-equity ratio of approximately 1.9 to 1, below the board-approved limit of 2.5 to 1[260][261]. - The percentage of fixed-rate debt was approximately 88% as of September 30, 2025, within the targeted range of 75% to 100%[261]. - The company plans to continue issuing debt, which may be secured or unsecured, and may also issue additional equity to finance its business[258]. Risk Management - The company anticipates that its primary market risks will relate to credit quality, market interest rates, liquidity of assets, and commodity prices[278]. - The company actively manages credit risk through thorough due diligence, strong structural protections, and continuous portfolio monitoring[290]. - The company employs various interest rate management techniques to mitigate risks, including matching debt maturities with asset maturities and using interest rate swaps[282]. - Environmental risks are integral to the company's investment parameters, and ongoing asset management includes monitoring these risks[290]. - Changes in discount rates will impact the fair value of certain assets recorded at fair value in the financial statements[285].

Core Insights - HA Sustainable Infrastructure Capital (HASI) reported quarterly earnings of $0.8 per share, exceeding the Zacks Consensus Estimate of $0.69 per share, and up from $0.52 per share a year ago [1][2] - The company achieved revenues of $28.56 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 51.90%, compared to $21.33 million in the same quarter last year [3] - The stock has gained approximately 7.9% since the beginning of the year, while the S&P 500 has increased by 15.6% [4] Earnings Performance - The earnings surprise for the recent quarter was +15.94%, following a previous quarter where the company reported earnings of $0.6 per share against an expectation of $0.62, resulting in a surprise of -3.23% [2] - Over the last four quarters, the company has exceeded consensus EPS estimates two times [2] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.70 on revenues of $17.7 million, and for the current fiscal year, it is $2.63 on revenues of $69.8 million [8] - The estimate revisions trend for the company was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy), indicating expected outperformance in the near future [7] Industry Context - The Financial - Miscellaneous Services industry, to which HASI belongs, is currently ranked in the top 35% of over 250 Zacks industries, suggesting a positive outlook for the sector [9] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [6]

Financial Data and Key Metrics Changes - Adjusted earnings per share (EPS) in Q3 was $0.80, the highest quarterly EPS reported in the company's history, with year-to-date adjusted EPS at $2.04, up 11% year-over-year [7][17] - Adjusted recurring net investment income increased by 42% in the quarter and 27% year-to-date [17][23] - Managed assets grew 15% year-over-year to $15 billion, while the portfolio increased by 20% [20][21] Business Line Data and Key Metrics Changes - The company closed over $650 million in new transactions in Q3, totaling $1.5 billion for the first three quarters of 2025, with expectations to exceed $3 billion for the full year, up more than 30% year-over-year [9][20] - New asset yield in Q3 was greater than 10.5% for the sixth consecutive quarter [9] - The company maintained a low annual realized loss rate of under 10 basis points, reinforcing cash flow predictability [10][11] Market Data and Key Metrics Changes - The pipeline remains above $6 billion, indicating strong demand across key end markets, including utility-scale renewables and energy efficiency [15][16] - Higher retail electricity rates are driving demand in behind-the-meter (BTM) asset classes, including rooftop solar and energy efficiency [15] Company Strategy and Development Direction - The company is focused on asset-level investing with long-term programmatic partners, emphasizing disciplined underwriting and access to attractive capital sources [27] - The introduction of the CCH1 co-investment vehicle has enhanced the company's ability to engage in larger transactions, reflecting a shift towards larger project investments [26][46] Management's Comments on Operating Environment and Future Outlook - The operating environment remains supportive for expanding investment volumes, with capital markets experiencing low volatility [5][6] - The company expects to achieve roughly 10% adjusted EPS growth in 2025 and reaffirms guidance for 8%-10% compound annual EPS growth through 2027 [8][17] Other Important Information - The company completed a $1.2 billion structured equity investment in a major clean energy infrastructure project, marking a significant milestone [12][14] - The company has broadened its capital sources, enhancing its liquidity position to $1.1 billion at the end of the quarter [24] Q&A Session Summary Question: Is there a reason the SunZia project is not named? - The project referred to is indeed the SunZia project, and the returns are consistent with other recent transactions in the grid-connected portfolio [30][31] Question: Can you discuss the pipeline and its strength? - The pipeline remains above $6 billion, with no significant pull forward observed, indicating ordinary course activity from clients [39][40] Question: How does the $1.2 billion investment signal a shift in investment strategy? - The investment reflects the company's access to capital and willingness to engage in larger transactions while managing risk accordingly [46][47] Question: What was the impact of the SunStrong ABS refinancing on the quarter? - The refinancing resulted in a cash distribution of approximately $240 million, with $200 million used to pay off mezzanine loans [50][53] Question: How have tax credit changes impacted investment types? - The extension of tax credits for wind and solar has maintained the traditional combination of tax equity structures in the market [61] Question: Are prepaid leases a product of interest? - The company is open to exploring prepaid leases but has not yet encountered any opportunities [64] Question: What is the maturity profile of the existing portfolio? - The weighted average life of the assets is around 10 years, and the recent increase in principal collections was driven by the SunStrong refinancing [67]

Financial Data and Key Metrics Changes - The company reported an adjusted earnings per share (EPS) of $0.80 for Q3 2025, the highest quarterly EPS in its history, with year-to-date adjusted EPS at $2.04, up 11% year-over-year [6][16] - Adjusted recurring net investment income increased by 42% in the quarter and 27% year-to-date [16][21] - Managed assets grew 15% year-over-year to $15 billion, while the portfolio increased by 20% [19] Business Line Data and Key Metrics Changes - The company closed over $650 million in new transactions in Q3, totaling $1.5 billion for the first three quarters of 2025, with expectations to exceed $3 billion for the full year, up more than 30% year-over-year [8][25] - New asset yield in Q3 was greater than 10.5% for the sixth consecutive quarter [8] Market Data and Key Metrics Changes - The pipeline remains above $6 billion, indicating strong demand across key end markets, including utility-scale renewables, distributed solar, and energy efficiency [14][15] - Higher retail electricity rates are driving demand in behind-the-meter (BTM) asset classes, including rooftop solar and energy efficiency [14] Company Strategy and Development Direction - The company aims for 8%-10% compound annual EPS growth through 2027, with an expected 10% adjusted EPS growth in 2025 [7][16] - The strategy includes optimizing returns on existing assets and managing liabilities to lower the cost of capital [7][10] Management's Comments on Operating Environment and Future Outlook - The operating environment is favorable, with low capital market volatility and active client pipelines, supporting investment volume expansion [5][25] - The company is well-positioned to capitalize on attractive investment opportunities across various markets, including renewable energy and energy efficiency [5][14] Other Important Information - The company completed the largest investment in its history, a $1.2 billion structured equity investment in a major clean energy infrastructure project [11][12] - The investment is expected to yield returns consistent with recent utility-scale investments, with a significant portion of funding occurring in 2026 [13] Q&A Session Summary Question: Inquiry about the SunZia project - The project referred to is indeed the SunZia project, with returns consistent with other recent transactions in the grid-connected portfolio [28][29] Question: Clarification on the pipeline status - The pipeline remains above $6 billion, with no significant pull forward observed, indicating ordinary course activity from clients [37][40] Question: Broader question on larger investments - The company is transitioning to include larger transactions while continuing to pursue smaller investments, reflecting its growing access to capital [44][46] Question: Impact of tax credit changes on investments - The extension of tax credits for wind and solar is expected to maintain the traditional combination of tax equity structures in the market [58][60] Question: Insight into principal collections and maturity profile - The increase in principal collections was driven by the SunStrong refinancing, with an expected amortization profile reflecting the weighted average life of around 10 years [66] Question: Impact of large transactions on EPS growth - Guidance for 2026 and beyond will be discussed in February, with current expectations reaffirmed at 8%-10% growth [73][75]

Financial Data and Key Metrics Changes - The company reported an adjusted earnings per share (EPS) of $0.80 for Q3 2025, the highest quarterly EPS in its history, with year-to-date adjusted EPS at $2.04, up 11% year-over-year [5][16] - Adjusted recurring net investment income increased by 42% year-over-year in the quarter and 27% year-to-date [16][21] - Managed assets grew 15% year-over-year to $15 billion, while the year-to-date adjusted return on equity (ROE) rose to 13.4% from 12.7% [7][19] Business Line Data and Key Metrics Changes - The company closed over $650 million in new transactions in Q3, totaling $1.5 billion for the first three quarters of 2025, with expectations to exceed $3 billion for the full year, representing a more than 30% year-over-year increase [8][19] - New asset yield in Q3 was greater than 10.5% for the sixth consecutive quarter, indicating strong returns on new investments [8][19] Market Data and Key Metrics Changes - The pipeline of new investments remains above $6 billion, indicating strong demand across key end markets, including utility-scale renewables, energy efficiency, and transportation [13][14] - Higher retail electricity rates are driving demand in behind-the-meter (BTM) asset classes, including rooftop solar and energy efficiency [14] Company Strategy and Development Direction - The company aims for 8%-10% compound annual EPS growth through 2027, with an expectation of approximately 10% adjusted EPS growth in 2025 [7][19] - The focus remains on asset-level investing with long-term programmatic partners, supported by disciplined underwriting and a diversified approach to capital access [26] Management's Comments on Operating Environment and Future Outlook - The management highlighted favorable economic trends as a tailwind for business growth, with continued demand for energy expected to drive investment opportunities [4][26] - The operating environment is conducive to business activities, with low capital market volatility and active client pipelines [4][26] Other Important Information - The company completed a $1.2 billion structured equity investment in a major clean energy infrastructure project, marking a significant milestone in its investment capacity [11][12] - The company has broadened its capital sources, enhancing its ability to fund growth at an attractive cost [22] Q&A Session Summary Question: Is there a reason the project was not named? - The project referred to is the SunZia project, and the returns are consistent with other transactions in the grid-connected portfolio [30] Question: Can you discuss the pipeline and its strength? - The pipeline remains above $6 billion, with no significant pull forward observed, indicating ordinary course activity from clients [34] Question: How does the large transaction impact future EPS growth? - The company will provide more guidance on 2026 and 2027 in February, but the current transaction volumes are expected to support continued growth [59] Question: What impact do tax credit changes have on investment types? - The extension of tax credits for wind and solar is expected to maintain traditional capital structures in the market [49] Question: Are prepaid leases of interest to the company? - The company has not yet seen opportunities in prepaid leases but is open to exploring them in the future [51]