RBC says Tetra Tech guidance update ‘likely better’ than some investors feared

RBC Capital notes that Tetra Tech’s (TTEK) Q1 results were ahead of consensus while the FY25 EPS guidance range was expanded and the bottom end of net revenue guidance was lowered, with the downside reflecting the risks to the company’s results stemming from changes coming from the new U.S. administration, primarily USAID funding as of now. The firm, which added that it believes the guidance update is “likely better than some investors may have feared heading into the print,” kept an Outperform rating and $52 price target on shares ahead of the company’s call, adding that it will be looking for management’s updated views on how the funding backdrop could evolve through the remainder of FY25.