APi Group’s Strategic Growth and M&A Plans Justify Buy Rating

William Blair analyst Tim Mulrooney has maintained their bullish stance on APG stock, giving a Buy rating today.

Tim Mulrooney has given his Buy rating due to a combination of factors that highlight APi Group’s strategic positioning and growth potential. The company’s strategy focuses on leveraging inspection work, careful project selection, and leadership development, which are expected to drive organic revenue growth in the mid-single digits. This growth is further supported by high-single-digit increases in inspection, monitoring, and service revenues, contributing to more stable and profitable branches.
Additionally, APi Group’s plans for mergers and acquisitions, including both smaller bolt-ons and larger platform acquisitions, are anticipated to bolster its revenue and margin goals. The company aims to achieve $10 billion in revenue with margins exceeding 16% by 2028, generating substantial free cash flow. Despite shares trading at a higher multiple compared to historical averages, the expectation of improved service mix and gross margins suggests potential for continued multiple expansion, reinforcing the Buy recommendation.

Mulrooney covers the Industrials sector, focusing on stocks such as APi Group, WillScot Mobile Mini Holdings, and Montrose Environmental Group. According to TipRanks, Mulrooney has an average return of 11.5% and a 67.86% success rate on recommended stocks.

In another report released today, Barclays also maintained a Buy rating on the stock with a $48.00 price target.