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ABM Industries (ABM)
NYSE:ABM
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ABM Industries (ABM) AI Stock Analysis

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ABM

ABM Industries

(NYSE:ABM)

Rating:75Outperform
Price Target:
$55.00
▲(15.30%Upside)
ABM Industries' overall score is driven by strong financial performance and positive developments in corporate governance. Technical analysis and valuation suggest caution due to potential overvaluation and mixed technical signals. Earnings call insights show growth prospects tempered by operational challenges. Corporate events, including strategic appointments, bolster future outlook.
Positive Factors
Financial Performance
ABM reported revenue and operating EPS above expectations, indicating strong financial performance.
Future Prospects
ABM increased the lower end of FY25 operating EPS guidance, showing confidence in future earnings growth.
Growth Opportunities
Strong organic growth in the technical solutions business contributed to better-than-expected top-line performance.
Negative Factors
Competitive Pressure
Competition for facility services contracts is limiting margin and EPS growth.
Market Reaction
Shares traded down roughly 15% as investors put more focus on the pacing of free cash flow generation than on the B&I group’s faster return to positive organic growth.
Profitability Challenges
Segment operating margin and free cash flow were below expectations, suggesting challenges in profitability.

ABM Industries (ABM) vs. SPDR S&P 500 ETF (SPY)

ABM Industries Business Overview & Revenue Model

Company DescriptionABM Industries Inc. is a leading provider of integrated facility solutions, operating across various sectors including business and industry, aviation, education, healthcare, and technology. The company offers a broad range of services such as janitorial, electrical and lighting, energy solutions, facilities engineering, HVAC and mechanical, landscape and turf, and parking. Founded in 1909, ABM is headquartered in New York City and serves a diverse clientele across the United States and internationally.
How the Company Makes MoneyABM Industries generates revenue through the provision of facility management services. Its revenue model is primarily based on service contracts with clients across different sectors they serve. The company earns money by offering recurring and non-recurring services, often structured as multi-year agreements. Key revenue streams include janitorial services, facility maintenance, and technical solutions, which are tailored to meet the specific needs of each client. ABM's significant partnerships with businesses, government entities, and educational institutions are crucial in securing long-term contracts that contribute substantially to its earnings. Additionally, the company leverages its expertise in energy solutions to help clients reduce energy consumption and costs, which also serves as a vital revenue channel.

ABM Industries Earnings Call Summary

Earnings Call Date:Jun 06, 2025
(Q2-2025)
|
% Change Since: -6.43%|
Next Earnings Date:Sep 04, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant achievements, including a record in new bookings, a return to organic growth in key segments, and improved cash flow. However, challenges such as temporary project delays, higher interest expenses, and margin pressures in specific segments were also noted. Overall, the positive developments in growth and strategic investments are counterbalanced by these challenges.
Q2-2025 Updates
Positive Updates
Record New Bookings
ABM generated $1.1 billion in new bookings during the first half of 2025, marking a new record for the company. This represents an 11% increase year-over-year.
Return to Organic Growth
Both the B&I and M&D segments returned to organic growth, with B&I up 3% and M&D up 2% year-over-year.
Strong Performance in Key Segments
Technical Solutions and Aviation segments led revenue growth with 19% and 9% increases, respectively. The Aviation segment secured a $25 million contract at Miami International Airport.
Improved Cash Flow
Free cash flow improved by $138 million over Q1 2025, with expectations to meet full-year normalized free cash flow targets.
Positive Trends in Prime Office Space
Market indicators for prime commercial office space show improvements, with a decline in vacancy rates and increased demand for high-quality buildings.
Continued Investment in Growth
The company is investing in sales talent and capabilities, particularly in high-growth sectors like semiconductors, e-commerce, and data centers.
Negative Updates
Temporary Project Delays in ATS
Temporary project delays and service mix headwinds impacted ATS profitability in Q2.
Higher Interest Expense
Interest expense increased by $3.3 million from the previous year due to higher average debt balances.
Challenges with ERP Implementation
Operational friction from the ERP conversion affected Q1 and Q2 cash flow, though improvements are expected in the second half.
Margin Pressure in M&D Segment
The M&D segment experienced a margin decline due to investments in technical sales talent and strategic pricing on select new contracts.
Mixed Performance in APS Margins
Technical Solutions margins were impacted by project timing, service mix shifts, and higher amortization costs.
Company Guidance
During the ABM Industries Second Quarter 2025 Earnings Call, several key metrics were highlighted as part of the company's guidance. ABM reported a record $1.1 billion in new bookings in the first half of the fiscal year, contributing to a 3.8% organic revenue growth. Total revenue for the quarter was $2.1 billion, with an adjusted EPS of $0.86. The company experienced a return to organic growth in its B&I and M&D segments, with M&D posting nearly $400 million in revenue, accounting for 20% of the total company revenue. The Aviation segment saw a 9% revenue growth, while Technical Solutions achieved a 19% increase. ABM reaffirmed its full-year adjusted EPS guidance in the range of $3.65 to $3.80 and expects an adjusted EBITDA margin between 6.3% and 6.5%. Free cash flow for the quarter improved by $138 million over the first quarter, and ABM expects to meet its full-year normalized free cash flow target of $250 million to $290 million.

ABM Industries Financial Statement Overview

Summary
ABM Industries shows strong revenue growth and stable profitability, with a solid balance sheet and manageable leverage. However, cash flow management needs improvement due to negative free cash flow, indicating a need to enhance liquidity.
Income Statement
85
Very Positive
ABM Industries demonstrates robust revenue growth, with a TTM revenue increase of 1.66% from the previous year. The gross profit margin stands at a healthy 13.35%, and the company maintains a stable EBIT margin of 2.55%. Net profit margin is slightly lower at 0.93%, indicating potential areas for cost optimization. Overall, the company's revenue trajectory and consistent profitability reflect strong operational performance.
Balance Sheet
78
Positive
ABM Industries exhibits a solid balance sheet with a debt-to-equity ratio of 0.91, indicating manageable leverage levels. The equity ratio is 34.36%, reflecting a stable financial foundation. Return on equity (ROE) is modest at 4.32%, suggesting room for enhancing shareholder returns. The company's balance sheet stability supports its growth and operational strategies.
Cash Flow
70
Positive
The cash flow analysis reveals challenges with a negative free cash flow in the TTM, primarily due to capital expenditures. However, the operating cash flow to net income ratio is 0.46, indicating that the company generates a reasonable amount of cash relative to earnings. Despite current cash flow constraints, ABM Industries has the potential to improve its liquidity and cash generation capabilities.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.36B8.10B7.81B6.23B5.99B
Gross Profit1.12B1.13B1.05B970.40M830.60M
EBITDA414.40M460.60M461.10M296.10M372.50M
Net Income81.40M251.30M230.40M126.30M300.00K
Balance Sheet
Total Assets5.10B4.93B4.87B4.44B3.78B
Cash, Cash Equivalents and Short-Term Investments64.60M69.50M73.00M62.80M394.20M
Total Debt1.47B1.44B1.40B1.03B886.10M
Total Liabilities3.32B3.13B3.15B2.83B2.28B
Stockholders Equity1.78B1.80B1.72B1.61B1.50B
Cash Flow
Free Cash Flow167.30M190.70M-30.40M280.00M419.50M
Operating Cash Flow226.70M243.30M20.40M314.30M457.50M
Investing Cash Flow-171.90M-62.10M-241.50M-740.00M-27.50M
Financing Cash Flow-61.50M-186.30M235.50M92.40M-94.10M

ABM Industries Technical Analysis

Technical Analysis Sentiment
Negative
Last Price47.70
Price Trends
50DMA
48.43
Negative
100DMA
48.09
Negative
200DMA
50.61
Negative
Market Momentum
MACD
0.08
Positive
RSI
49.46
Neutral
STOCH
21.34
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 47.7 is below the 20-day moving average (MA) of 47.96, below the 50-day MA of 48.43, and below the 200-day MA of 50.61, indicating a bearish trend. The MACD of 0.08 indicates Positive momentum. The RSI at 49.46 is Neutral, neither overbought nor oversold. The STOCH value of 21.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABM.

ABM Industries Risk Analysis

ABM Industries disclosed 24 risk factors in its most recent earnings report. ABM Industries reported the most risks in the "Production" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

ABM Industries Peers Comparison

Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$4.14B14.6117.36%1.63%5.29%31.95%
75
Outperform
$2.96B38.044.30%2.14%3.52%-67.27%
73
Outperform
$12.71B32.577.44%0.11%3.96%-17.48%
71
Outperform
$11.37B33.3911.77%0.93%-3.47%-45.03%
66
Neutral
$1.55B85.782.56%-2.85%-108.99%
65
Neutral
$11.16B15.865.39%1.92%3.11%-24.90%
61
Neutral
$3.11B21.437.15%0.80%4.18%18.93%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ABM
ABM Industries
47.70
-6.30
-11.67%
MMS
Maximus
73.45
-18.22
-19.88%
UNF
UniFirst
173.40
-17.71
-9.27%
ARMK
ARAMARK Holdings
43.89
10.36
30.90%
RTO
Rentokil Initial
25.02
-4.74
-15.93%
BV
BrightView Holdings
16.27
2.83
21.06%

ABM Industries Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
ABM Industries Expands Board with New Director
Positive
Jun 12, 2025

On June 11, 2025, ABM Industries announced the election of Carol A. Clements to its Board of Directors, expanding the board from ten to eleven members. Ms. Clements, a technology and digital transformation leader with over 25 years of experience, currently serves as Chief Digital and Technology Officer at JetBlue Airways Corporation. Her appointment is seen as a strategic move to leverage her expertise in technology and innovation, aligning with ABM’s focus on redefining industry standards through advanced digital solutions.

The most recent analyst rating on (ABM) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on ABM Industries stock, see the ABM Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
ABM Industries Appoints New CFO David Orr
Positive
Jun 10, 2025

On June 6, 2025, ABM Industries appointed David Orr as the new Executive Vice President and Chief Financial Officer, succeeding Earl Ellis who has served since November 2020. Orr, who has been with ABM since 2001, brings extensive experience in finance and strategy, having previously held roles such as Senior Vice President of Financial Planning and Analysis. His appointment is seen as a move to leverage his deep understanding of the industry and operational excellence to drive growth and transformation for ABM. Ellis will continue as a Senior Advisor until September 5, 2025, and will receive severance benefits as per his employment agreement.

The most recent analyst rating on (ABM) stock is a Buy with a $56.00 price target. To see the full list of analyst forecasts on ABM Industries stock, see the ABM Stock Forecast page.

DividendsBusiness Operations and StrategyFinancial Disclosures
ABM Industries Reports Q2 Revenue Growth and New Bookings
Positive
Jun 6, 2025

On June 6, 2025, ABM Industries announced its fiscal second quarter results, reporting a 4.6% increase in revenue to $2.1 billion, driven by 3.8% organic growth. Despite a slight decrease in net income compared to the previous year, adjusted net income and EBITDA showed improvement. The company secured $1.1 billion in new bookings, highlighting its strong market position. ABM also declared a quarterly dividend of $0.265 per share, payable in August 2025, marking its 237th consecutive quarterly dividend.

The most recent analyst rating on (ABM) stock is a Hold with a $45.00 price target. To see the full list of analyst forecasts on ABM Industries stock, see the ABM Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 16, 2025