Macmahon Holdings' (ASX:MAH) stock offers a clear investment opportunity, contingent on converting its AU$24.8 billion tender pipeline into orders, according to a Thursday note by Euroz Hartleys.

The firm expects MAH to generate annual free cash flow of about AU$100 million, based on estimated earnings before interest, taxes, depreciation, and amortization (EBITDA) of AU$180 million in the fiscal second half and projects net debt to be AU$170 million by year-end.

MAH's order book is expected to contribute about AU$2 billion to its AU$2.55 billion revenue forecast for 2026, with the remainder expected to come from scope creep and new contracts, Euroz Hartleys added.

Euroz Hartleys also highlighted MAH's return on capital employed and EBITDA, projecting a path to AU$3 billion in revenue and AU$200 million in earnings before interest and taxes over time.

Looking ahead, Euroz Hartleys expects a "cleaner half" for MAH, with cash, new contracts, and the potential sale of its Homeground Gladstone accommodation driving renewed investor focus.

Euroz Hartleys maintained MAH's buy rating but raised its price target to AU$0.43 from AU$0.41.