ABM Industries (ABM) AI Stock Analysis

• Market Cap: $2.82B
• Dividend Yield: 2.07%
• Average Volume (3M): 556.29K
• Price to Earnings (P/E): 35.7
• Beta (1Y): 0.91
• Revenue Growth: 2.81%
• EPS Growth: -67.57%
• Country: US
• Employees: 100,000
• Sector: Industrials
• Sector Strength: 63
• Industry: Specialty Business Services
• EPS (TTM): 1.27
• Shares Outstanding: 62,231,438
• 10 Day Avg. Volume: 468,335
• 30 Day Avg. Volume: 556,290
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.35
• Price to Cash Flow (P/CF): -6.90
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $59.00
• Price Target Upside: 30.19% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

ABM Industries shows strong potential with robust revenue growth and positive outlook from its latest earnings call. However, technical indicators suggest caution with bearish trends, and valuation metrics imply the stock may be overvalued. While the company faces challenges in specific segments and cash flow, its strategic initiatives and segment strength provide a balanced outlook.

Positive Factors

Earnings Growth

ABM increased the lower end of FY25 operating EPS guidance, showing confidence in future earnings growth.

Revenue Performance

Revenue of $2.11 billion was up 2.2% year-over-year, above the consensus estimate of $2.09 billion.

Negative Factors

Commercial Real Estate Impact

The Business & Industry segment revenue was down due to less commercial real estate janitorial services work, impacting overall revenue.

Profitability Challenges

Segment operating margin and free cash flow were below expectations, suggesting challenges in profitability.

ABM Industries Business Overview & Revenue Model

Company Description

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. The company operates through Business & Industry, Technology & Manufacturing, Education, Aviation, and Technical Solutions segments. It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, and mechanical and electrical services; and vehicle maintenance and other services to rental car providers. The company was incorporated in 1985 and is based in New York, New York.

How the Company Makes Money

ABM Industries makes money primarily through service contracts with clients in various sectors such as commercial buildings, hospitals, schools, and airports. The company generates revenue from its comprehensive range of facility services, which include janitorial services, building maintenance, energy solutions, and parking management. ABM's business model is largely based on long-term contracts that provide stable and recurring revenue streams. Additionally, the company benefits from strategic partnerships and acquisitions that expand its service offerings and geographical reach, thereby contributing to its earnings.

ABM Industries Financial Statement Overview

Summary

ABM Industries demonstrates strong revenue growth and stability in its operations, yet faces challenges with declining margins and cash flow pressures. The balance sheet is robust but carries substantial debt, necessitating careful financial management to sustain growth and profitability.

Income Statement

ABM Industries has shown strong revenue growth with a trailing twelve months increase from $7.81 billion to $8.40 billion. However, gross profit margin has declined due to a drop in gross profit. The net profit margin is stable, but relatively low. EBIT and EBITDA margins are moderate, indicating stable operational performance.

Balance Sheet

The company maintains a healthy equity position with an equity ratio of 34.1%. However, it has a significant debt load with a debt-to-equity ratio of 0.85, suggesting reliance on leverage. ROE has decreased, reflecting pressure on profitability in relation to equity.

Cash Flow

Operating cash flow has decreased significantly in the TTM period. Free cash flow has also reduced, resulting in a negative growth rate. The operating cash flow to net income ratio indicates reasonable cash conversion, but the free cash flow to net income ratio highlights challenges in maintaining cash flow strength.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
8.40B	8.36B	8.10B	7.81B	6.23B	5.99B
	Gross Profit
4.80B	8.36B	1.13B	977.00M	925.50M	782.20M
	EBIT
215.40M	212.00M	409.50M	348.80M	206.30M	278.30M
	EBITDA
298.80M	325.20M	534.00M	461.10M	296.10M	372.50M
	Net Income Common Stockholders
80.40M	81.40M	251.30M	230.40M	126.30M	200.00K
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
39.45M	64.60M	69.50M	73.00M	62.80M	394.20M
	Total Assets
1.55B	5.10B	4.93B	4.87B	4.44B	3.78B
	Total Debt
140.50M	1.45B	1.44B	1.40B	1.03B	886.10M
	Net Debt
101.05M	1.39B	1.37B	1.33B	969.80M	491.90M
	Total Liabilities
809.64M	3.32B	3.13B	3.15B	2.83B	2.28B
	Stockholders Equity
739.02M	1.78B	1.80B	1.72B	1.61B	1.50B
Cash Flow		Free Cash Flow
58.10M	167.30M	190.70M	-30.40M	280.00M	419.50M
	Operating Cash Flow
120.60M	226.70M	243.30M	20.40M	314.30M	457.50M
	Investing Cash Flow
-173.20M	-171.90M	-62.10M	-241.50M	-740.00M	-27.50M
	Financing Cash Flow
54.90M	-61.50M	-186.30M	235.50M	92.40M	-94.10M

ABM Industries Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 45.32
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABM, the sentiment is Negative. The current price of 45.32 is below the 20-day moving average (MA) of 47.32, below the 50-day MA of 50.65, and below the 200-day MA of 52.18, indicating a bearish trend. The MACD of -1.19 indicates Negative momentum. The RSI at 42.89 is Neutral, neither overbought nor oversold. The STOCH value of 56.39 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABM.

ABM Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROL	78 Outperform	$25.33B	54.22	37.52%	1.21%	10.26%	8.47%
CWT	77 Outperform	$2.88B	14.90	12.46%	2.35%	30.48%	267.73%
CINT	72 Outperform	$690.92M	23.64	10.34%	―	-1.77%	-8.52%
CBRE	70 Outperform	$35.43B	37.55	11.61%	―	11.95%	-1.25%
ABM	66 Neutral	$2.82B	35.74	4.46%	2.07%	2.81%	-67.57%
Sector *	62 Neutral	$7.26B	12.38	3.01%	3.40%	3.58%	-14.13%
TISI	52 Neutral	$85.91M	―	-161.69%	―	-1.20%	50.12%

ABM Industries Corporate Events

ABM Industries Approves 2025 Equity and Stock Plans

At the Annual Meeting on March 26, 2025, ABM Industries’ stockholders approved the amended 2021 Equity and Incentive Compensation Plan, increasing the authorized shares for issuance by 2,425,000 to a total of 6,400,000. This plan allows for various cash and equity awards to employees, directors, and consultants, with a focus on performance metrics such as stockholder return and operational efficiency. Additionally, the 2025 Employee Stock Purchase Plan was approved, allowing employees to purchase shares at a 5% discount, replacing the 2004 plan. The meeting also saw the election of directors, approval of executive compensation, and ratification of KPMG LLP as the independent auditor for 2025.