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AtkinsRealis (TSE:ATRL)
TSX:ATRL
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AtkinsRealis
(TSX:ATRL)
76Outperform
Positive Factors
Market Positioning
Well-positioned for the potential nuclear renaissance.
Valuation
Valuation has benefited from increased nuclear-related optimism.
Negative Factors
Investor Behavior
The main near-term risk to the valuation of ATRL’s nuclear segment is certain investors not having the patience to wait for contracts to emerge in a sector.
AtkinsRealis (ATRL) vs. S&P 500 (SPY)
Market Cap
$10.99B
Dividend Yield0.13%
Average Volume (3M)527.08K
Price to Earnings (P/E)34.2
Beta (1Y)0.87
Revenue Growth13.54%
EPS Growth125.19%
CountryCA
Employees37,246
SectorIndustrials
Sector Strength72
IndustryConstruction
Share Statistics
EPS (TTM)1.83
Shares Outstanding174,842,210
10 Day Avg. Volume658,592
30 Day Avg. Volume527,080
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)1.18
Price to Cash Flow (P/CF)10.30
P/FCF Ratio10.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$101.71Price Target Upside61.80% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
AtkinsRealis Business Overview & Revenue Model
Company DescriptionSNC-Lavalin Group, Inc. engages in the provision of engineering and construction services. It offers engineering, procurement, construction, project management, project financing services to industry sectors. The company operates through the following segments: Mining & Metallurgy; Oil & Gas; Nuclear; Clean Power; Thermal Power; Infrastructure; Engineering, Design & Project Management (EDPM); and Capital. The Mining & Metallurgy segment provides tailored solutions in the aluminium, gold, copper, iron ore, nickel, fertilizer, commodities related to rechargeable batteries for cars, mobile phone and other electronic devices, and sulphur product sectors. The Oil & Gas segment includes projects in the upstream, midstream, downstream and supporting infrastructure sectors for major oil and gas and resources companies. The Nuclear segment supports clients from consultancy, EPCM services, field services, technology services, spare parts, reactor support & decommissioning and waste management. The Clean Power segment combines the company's established leadership in hydro, transmission and distribution and extensive renewable energy capabilities, including in energy storage, providing fully integrated life-of-asset services capabilities. The Thermal Power segment includes projects in thermal power generation. The Infrastructure segment provides end-to-end services to a sectors, including mass transit, heavy rail, roads, bridges, airports, ports and harbours, facilities architecture and engineering (structural, mechanical, electrical), industrial (pharmaceutical, agrifood, life sciences, automation, industrial processes), geotechnical engineering, materials testing, and water infrastructure. The EDPM segment incorporates all engineering, design and project management services around the world, except for the Canadian market. The company was founded in 1911 and is headquartered in Montreal, Canada.
How the Company Makes MoneyAtkinsRealis generates revenue primarily through its consulting and engineering services, which are offered to both public and private sector clients worldwide. The company earns money by providing specialized expertise in project management, design, and engineering, often through long-term contracts and partnerships. Key revenue streams include fees for planning and designing infrastructure projects, managing complex construction initiatives, and offering strategic advisory services to improve operational efficiency. Additionally, AtkinsRealis may engage in joint ventures or partnerships to expand its service offerings and enhance its market reach, further contributing to its earnings.
AtkinsRealis Financial Statement Overview
Summary
AtkinsRealis demonstrates a solid financial performance with robust revenue growth and improved profitability. The balance sheet is strengthening with increasing equity and manageable leverage levels. Cash flow analysis reflects strong operational cash generation and effective capital management. Overall, the company is on a positive trajectory with healthy financial metrics, though continued focus on operational efficiency and leverage management will be beneficial.Income Statement
AtkinsRealis has shown a strong revenue growth trajectory with a 7.8% increase in total revenue from the previous year. The TTM period indicates a stable gross profit margin of 8%, though there is a decline from the prior year. The net profit margin improved to 3.5%, showcasing enhanced profitability. However, the EBIT margin of 3.9% reflects a need for operational efficiency. Overall, the company is showing positive growth trends and profitability improvements.75
Positive
Balance Sheet
The company's balance sheet reveals a debt-to-equity ratio of 0.68, indicating moderate leverage. Stockholders' equity has increased, enhancing financial stability with an equity ratio of 33.1%. However, the return on equity has improved to 9% in the TTM, reflecting better utilization of equity. While there is a strong equity base, the moderate leverage suggests some potential risk if not managed appropriately.68
Positive
Cash Flow
The cash flow analysis shows a significant turnaround with a substantial increase in free cash flow. The free cash flow growth rate is remarkable, and the operating cash flow to net income ratio is robust at 1.52, indicating strong cash conversion. The company has effectively managed its capital expenditures, resulting in positive free cash flow, which enhances liquidity and operational flexibility.82
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 9.31B | 8.63B | 7.55B | 7.37B | 7.01B | 9.52B | Gross Profit |
| 745.61M | 766.00M | 413.11M | 489.31M | 125.35M | 354.12M | EBIT |
| 361.60M | 506.62M | 195.78M | 235.27M | -185.90M | 60.72M | EBITDA |
| 763.59M | 752.00M | 283.59M | 383.82M | -14.32M | 3.13B | Net Income Common Stockholders |
| 321.42M | 287.21M | 9.75M | 666.56M | -965.45M | 328.22M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 729.73M | 540.64M | 645.06M | 680.24M | 1.08B | 1.31B | Total Assets |
| 12.94B | 10.17B | 9.46B | 9.88B | 10.34B | 11.64B | Total Debt |
| 3.67B | 2.37B | 2.49B | 2.16B | 2.50B | 2.67B | Net Debt |
| 3.03B | 1.90B | 1.92B | 1.55B | 1.57B | 1.48B | Total Liabilities |
| 9.28B | 6.99B | 6.58B | 6.88B | 7.77B | 7.93B | Stockholders Equity |
| 3.65B | 3.16B | 2.87B | 2.97B | 2.56B | 3.72B |
| Cash Flow | Free Cash Flow | ||||
| 370.88M | -25.82M | -355.19M | 27.91M | 45.66M | -477.72M | Operating Cash Flow |
| 487.83M | 65.96M | -245.36M | 134.20M | 121.48M | -355.27M | Investing Cash Flow |
| 7.98M | 9.48M | -82.47M | -263.71M | -185.12M | 2.72B | Financing Cash Flow |
| -513.56M | -170.91M | 283.12M | -192.53M | -190.43M | -1.80B |
AtkinsRealis Technical Analysis
Negative
62.86
Price Trends
72.63
Negative
72.22
Negative
63.86
Negative
Market Momentum
-2.58
Positive
28.58
Positive
11.11
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATRL, the sentiment is Negative. The current price of 62.86 is below the 20-day moving average (MA) of 69.42, below the 50-day MA of 72.63, and below the 200-day MA of 63.86, indicating a bearish trend. The MACD of -2.58 indicates Positive momentum. The RSI at 28.58 is Positive, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:ATRL.
AtkinsRealis Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $10.99B | 34.25 | 9.59% | 0.13% | 13.54% | 125.19% | |
71 Outperform | C$31.87B | 45.76 | 9.33% | 0.61% | 11.98% | 22.53% | |
62 Neutral | $8.16B | 12.85 | 0.64% | 3.04% | 3.83% | -15.83% | |
51 Neutral | C$1.13B | ― | -5.87% | 4.21% | -8.64% | -136.62% |
* Industrials Sector Average
Performance Comparison
TSE:ATRL
AtkinsRealis
62.86
7.68
13.91%
STN
Stantec
80.85
-3.79
-4.48%
BDRBF
Bombardier
54.36
14.66
36.93%
TSE:ARE
Aecon Group Inc.
18.05
2.54
16.38%
TSE:WSP
WSP Global
241.24
17.38
7.76%
AtkinsRealis Earnings Call Summary
Earnings Call Date: Nov 14, 2024 | % Change Since: -2.03% | Next Earnings Date: Mar 13, 2025
Earnings Call Sentiment Positive
The earnings call demonstrated strong financial performance and strategic growth, particularly in backlog and nuclear sectors, despite some regional challenges and anticipated flat growth in Q4.Highlights
Record Backlog Growth
Backlog at the end of the third quarter of 2024 was approximately $16.8 billion, an increase of 35% year-over-year, marking another record high for AtkinsRéalis.
Strong Organic Revenue Growth
AtkinsRéalis Services revenue organically increased 14%, with segment adjusted EBIT increasing 27% to approximately $239 million. Nuclear revenue organically grew 35% to $369 million.
Successful Nuclear Contract Wins
Secured a 30-year life extension contract for 2 CANDU reactors at the Qinshan Nuclear Generating Station and made progress on new-build contract negotiations for C3 and C4 at Cernavoda in Romania.
Positive Cash Flow and Strong Financial Performance
Generated over $200 million in operating cash flow this quarter, with total revenues for the quarter increasing 11% year-over-year to $2.5 billion.
Strategic Geographic Expansion
Continued expansion in high-growth regions like the U.S. and Latin America with organic revenue growth of 11% year-over-year.
Lowlights
Decline in Canada's Organic Revenue
In Canada, year-over-year organic revenue declined 8% due to the ending of a project with a high percentage of flow-through revenue.
Challenges in Emergency Work in the U.S.
Lower income from emergency work in the U.S. due to a decrease in FEMA-related projects, impacting margins.
Flat Organic Growth Anticipated in Q4
Anticipated flat organic growth in Q4 due to the closeout of a couple of major projects and a strong prior year comparison.
Company Guidance
During the AtkinsRéalis Third Quarter 2024 Results Conference Call, the company provided detailed guidance and insights into their financial and operational metrics. The company reported an organic increase in Services revenue by 14% and a 27% rise in segment adjusted EBIT to approximately $239 million. Engineering Services regions experienced an 8% organic revenue growth, reaching $1.8 billion, while Nuclear revenue surged by 35% to $369 million. The backlog reached a record high of approximately $16.8 billion, marking a 35% increase year-over-year. Additionally, AtkinsRéalis generated over $200 million in operating cash flow this quarter. The company is targeting full-year revenue growth between 8% and 10%, with a focus on increasing margins across its service lines, aiming for 17% to 18% by 2027. They highlighted significant Nuclear business opportunities, with a backlog growth of over 200% year-over-year, driven by life extension contracts and new projects. The company also emphasized their strategic positioning for growth in high-demand areas and their continued focus on optimizing operations to achieve their financial targets.AtkinsRealis Corporate Events
AtkinsRéalis Sees Strong Growth in Q3 2024
Nov 14, 2024
AtkinsRéalis reported a strong third quarter in 2024 with notable growth in organic revenue and operating cash flows. The company achieved record high backlogs in their nuclear segment, driven by increased global demand for sustainable solutions. This financial success positions AtkinsRéalis well for future investments 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.