Maxim Group analyst Tate Sullivan has maintained their neutral stance on TTEK stock, giving a Hold rating yesterday.
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Tate Sullivan has given his Hold rating due to a combination of factors affecting Tetra Tech’s financial outlook. The company’s recent quarterly results exceeded expectations, driven by increased digital water automation projects and restoration work related to California wildfires. However, the backlog has decreased significantly, primarily due to reduced orders from the U.S. federal government, which poses a concern for future revenue streams.
Tetra Tech’s guidance for the upcoming fiscal year reflects a decline in revenue and earnings per share, largely attributed to the ongoing reduction in U.S. government contracts, especially from USAID. Despite the company’s efforts to utilize free cash flow for debt reduction, dividend increases, and share repurchases, the stock’s valuation at 25.2 times the FY26 EPS estimate suggests limited upside potential. These elements collectively support the decision to maintain a Hold rating, as the challenges in securing government contracts under the current administration weigh on the company’s growth prospects.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Hold rating on the stock with a $41.00 price target.