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Aecom (ACM)
:ACM
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Aecom Technology
(NYSE:ACM)80Outperform
Positive Factors
Financial Performance
ACM posted a positive start: EBITDA of $271mn increased 8% YoY on NSR growth of 5.5% YoY.
Market Position
AECOM has industry-leading market share across its top end markets in a highly fragmented industry.
Negative Factors
Market Uncertainty
Federal elections are impacting key markets, making project lettings slower and more irregular, increasing uncertainty in the near term.
Aecom Technology (ACM) vs. S&P 500 (SPY)
Market Cap
$12.48B
Dividend Yield0.95%
Average Volume (3M)1.04M
Price to Earnings (P/E)26.8
Beta (1Y)0.85
Revenue Growth8.89%
EPS Growth669.67%
CountryUS
Employees51,000
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)3.52
Shares Outstanding132,689,650
10 Day Avg. Volume1,219,803
30 Day Avg. Volume1,038,637
Financial Highlights & Ratios
PEG Ratio0.04
Price to Book (P/B)N/A
Price to Sales (P/S)0.79
Price to Cash Flow (P/CF)21.30
P/FCF Ratio28.90
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$120.17Price Target Upside27.73% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering7
Aecom Technology Business Overview & Revenue Model
Company DescriptionAECOM Technology Corporation (ACM) is a global infrastructure consulting firm that provides professional technical and management support services. The company operates in various sectors, including transportation, facilities, environmental, energy, water, and government. AECOM offers a comprehensive range of services such as planning, consulting, architectural and engineering design, as well as program and construction management for a diverse set of clients worldwide.
How the Company Makes MoneyAECOM makes money primarily through providing professional services in areas such as planning, consulting, and engineering design. The company's revenue streams are largely derived from contracts with public and private sector clients, including governments, corporations, and non-profit organizations. AECOM engages in both long-term, large-scale projects and smaller, short-term assignments. Key revenue factors include the company's ability to secure contracts, often through competitive bidding processes, and its capacity to deliver complex, multidisciplinary projects that require integrated solutions. Additionally, partnerships and joint ventures with other firms can enhance AECOM's offerings and expand its market reach, contributing to its earnings.
Aecom Technology Financial Statement Overview
Summary
Aecom Technology exhibits strong financial performance with solid revenue growth and effective cash management. While the net profit margin is modest, the company's leverage and return on equity indicate a well-managed financial strategy.Income Statement
Aecom Technology demonstrates strong financial performance with consistent revenue and profit growth. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 6.8%, and the net profit margin is around 2.9%. Notably, the revenue has grown by about 12.8% from the previous year, indicating robust business expansion. EBIT and EBITDA margins also show healthy operating efficiency. However, the net profit margin is relatively modest, suggesting room for improved cost management and profitability.87
Very Positive
Balance Sheet
The balance sheet reveals a stable financial position with a debt-to-equity ratio of approximately 1.37, indicating moderate leverage. The equity ratio is around 18.6%, reflecting a balanced capital structure. Return on Equity (ROE) is approximately 21.5%, showcasing strong profitability relative to shareholder investment. However, the company’s leverage should be monitored to ensure it does not impede financial flexibility.79
Positive
Cash Flow
Aecom Technology's cash flow performance is solid, with a notable operating cash flow to net income ratio of 1.76, indicating effective cash generation relative to net income. The free cash flow growth rate is impressive at 30.8% year-over-year, suggesting strong cash flow management. The free cash flow to net income ratio is 1.63, reflecting efficient capital expenditure and cash flow utilization. Overall, the company maintains healthy cash flow metrics, supporting ongoing operations and potential investments.82
Very Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 16.22B | 16.11B | 14.38B | 13.15B | 13.34B | 13.24B | Gross Profit |
| 1.11B | 1.08B | 945.47M | 847.97M | 798.42M | 709.56M | EBIT |
| 917.82M | 827.44M | 324.13M | 646.80M | 629.55M | 381.46M | EBITDA |
| 1.17B | 1.08B | 543.64M | 826.86M | 813.36M | 580.02M | Net Income Common Stockholders |
| 474.87M | 402.27M | 55.33M | 414.63M | 319.79M | 186.85M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.32B | 1.32B | 1.26B | 1.17B | 1.23B | 1.71B | Total Assets |
| 12.06B | 12.06B | 11.23B | 11.27B | 11.85B | 13.12B | Total Debt |
| 3.03B | 3.03B | 2.75B | 2.80B | 2.89B | 2.81B | Net Debt |
| 1.45B | 1.45B | 1.49B | 1.63B | 1.66B | 1.10B | Total Liabilities |
| 9.69B | 9.69B | 8.85B | 8.66B | 9.02B | 9.71B | Stockholders Equity |
| 2.18B | 2.18B | 2.21B | 2.48B | 2.71B | 3.29B |
| Cash Flow | Free Cash Flow | ||||
| 772.16M | 827.49M | 590.38M | 576.62M | 568.41M | 215.03M | Operating Cash Flow |
| 835.52M | 827.49M | 695.98M | 713.64M | 704.67M | 329.62M | Investing Cash Flow |
| -148.59M | -210.64M | -138.18M | -175.03M | -421.09M | 2.04B | Financing Cash Flow |
| -290.51M | -295.46M | -472.94M | -588.32M | -872.53M | -1.63B |
Aecom Technology Technical Analysis
Negative
94.08
Price Trends
104.96
Negative
107.38
Negative
99.72
Negative
Market Momentum
-2.75
Positive
32.79
Neutral
33.27
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACM, the sentiment is Negative. The current price of 94.08 is below the 20-day moving average (MA) of 101.27, below the 50-day MA of 104.96, and below the 200-day MA of 99.72, indicating a bearish trend. The MACD of -2.75 indicates Positive momentum. The RSI at 32.79 is Neutral, neither overbought nor oversold. The STOCH value of 33.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACM.
Aecom Technology Risk Analysis
Aecom Technology disclosed 43 risk factors in its most recent earnings report. Aecom Technology reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Aecom Technology Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $12.48B | 26.76 | 21.55% | 0.95% | 8.89% | 669.67% | |
76 Outperform | C$13.46B | 37.23 | 12.27% | 0.73% | 15.75% | 7.64% | |
73 Outperform | $6.40B | 17.31 | 25.81% | 1.24% | 11.30% | ― | |
71 Outperform | $7.82B | 30.47 | 15.32% | 0.82% | 11.02% | 11.33% | |
66 Neutral | $6.06B | 2.94 | 54.32% | ― | 5.43% | 2094.12% | |
62 Neutral | $15.04B | 25.28 | 14.66% | 0.95% | -13.76% | -13.39% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
ACM
Aecom Technology
94.08
5.49
6.20%
FLR
Fluor
35.93
-0.75
-2.04%
J
Jacobs Solutions
122.72
1.10
0.90%
KBR
KBR
49.34
-11.78
-19.27%
TTEK
Tetra Tech
29.13
-7.46
-20.39%
TSE:STN
Stantec
118.00
7.27
6.56%
Aecom Technology Earnings Call Summary
Earnings Call Date: Feb 3, 2025 | % Change Since: -9.41% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance by AECOM in Q1 2025, with significant growth in financial metrics, backlog, and strategic pursuits, particularly in the Americas. Despite minor challenges in international markets, the overall outlook remains positive, driven by high employee engagement and industry recognition.Highlights
Record Employee Engagement and Industry Recognition
Employee engagement reached an all-time high, and AECOM was named the number one ranked company in its industry on Fortune’s World Most Admired Companies list for the 11th consecutive year.
Strong Financial Performance in Q1 2025
NSR increased by 5.5%, adjusted EBITDA rose by 8%, and adjusted EPS grew by 25%. Free cash flow increased by 28%.
Americas Segment Growth
NSR in the Americas increased by 9% in the Design business, and the segment-adjusted operating margin increased by 40 basis points.
Backlog and Pipeline at Record Highs
Total backlog achieved a new all-time high, with a 5% increase in the Design business backlog, including a 7% increase in the Americas.
High Win Rate in Strategic Pursuits
AECOM achieved a 100% win rate in its largest and most strategic pursuits in the first quarter.
Expanded Program Management Business
Program Management business grew three-fold in the past four years, now accounting for over 15% of total revenue.
Lowlights
Challenges in International Markets
Revenue in international markets varied, with certain areas like transportation in the UK remaining lower and a revenue decline in Australia.
Company Guidance
In the AECOM First Quarter 2025 Conference Call, the company provided an optimistic outlook and increased its financial guidance for fiscal 2025. Key metrics included a 5.5% increase in net service revenue (NSR), exceeding expectations, with the Americas segment showing a strong 9% growth in the Design business. Segment-adjusted operating margins rose by 40 basis points, surpassing the annual guidance of a 30 basis point increase. Adjusted EBITDA grew by 8%, while adjusted EPS saw a 25% increase, benefiting from a lower tax rate, though normalized EPS growth was 14%. Free cash flow improved by 28%, with $55 million returned to shareholders. The company's backlog reached a new all-time high with a 5% increase, including 7% in the Americas, and a book-to-burn ratio of 1.2, marking the 17th consecutive quarter above 1. AECOM emphasized its strategy of expanding its Program Management and Advisory Services, which now represent a significant portion of its revenue, and highlighted key growth drivers such as infrastructure investment and energy independence. The company remains confident in achieving a 17% margin by the end of fiscal 2026 and continues to allocate capital for growth and shareholder returns.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.