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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:70Outperform
Price Target:
$53.00
▲(9.82% Upside)
ABM Industries presents a mixed outlook with strong revenue growth and strategic initiatives supporting future potential. However, high valuation and cash flow challenges weigh on the overall score.
Positive Factors
Financial Performance
ABM increased the lower end of FY25 operating EPS guidance, showing confidence in future earnings growth.
New Contracts
ABM expects more business from high-end office buildings and has won a contract for a large new office building in New York City.
Revenue Growth
The company signed a new client within the semiconductor supply chain, securing a long-term revenue stream.
Negative Factors
Free Cash Flow
Free cash flow was well below expectations due to the timing of collecting accounts receivable.
Margin Pressure
The positive revenue surprise was not enough to offset the margin pressure and higher interest expense, which drove the EPS miss.
Revenue Challenges
Several large clients had approached ABM to lower contract costs as they consider their calendar 2026 budgets, leading to renegotiations at lower margins.

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

ABM Industries Business Overview & Revenue Model

Company DescriptionABM 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 MoneyABM generates revenue primarily through its comprehensive facility solutions offered to clients across different industries. The company operates on a contract-based model, providing services that are typically long-term contracts, often spanning several years. Key revenue streams include janitorial services, maintenance and engineering services, and specialized services like energy management and parking solutions. Additionally, ABM benefits from economies of scale, as it can leverage its extensive workforce and resources to provide cost-effective services. Significant partnerships with clients in sectors such as healthcare and education further contribute to stable and recurring revenue, while the company's commitment to sustainability and technology-driven solutions helps attract new business opportunities.

ABM Industries Earnings Call Summary

Earnings Call Date:Sep 05, 2025
(Q3-2025)
|
% Change Since: |
Next Earnings Date:Dec 17, 2025
Earnings Call Sentiment Neutral
ABM Industries demonstrated strong revenue growth and free cash flow generation, supported by strategic investments in AI and robust segment performances, particularly in Aviation and Education. However, margin pressures due to strategic pricing and slower recovery in certain commercial office markets pose challenges. The outlook remains cautiously optimistic with expectations of improvement in Q4.
Q3-2025 Updates
Positive Updates
Strong Organic Revenue Growth
ABM Industries reported 5% organic revenue growth in Q3 2025, with all segments contributing to this growth. The company's bookings increased by 15% year over year, securing over $1.5 billion in new business.
Significant Free Cash Flow Generation
ABM Industries generated over $150 million in free cash flow in Q3, driven by disciplined cash collection and a meaningful reduction in day sales outstanding.
Investments in Artificial Intelligence
The company is investing in AI tools to enhance RFP responses, HR support services, and operational efficiency, positioning itself to leverage AI for new revenue streams and improved client and team member experiences.
Aviation Segment Growth
Aviation revenue grew by 9% to $291.8 million, supported by strong passenger demand and new wins. Operating profit increased by 11%, with margins rising by 20 basis points to 6.8%.
Education Segment Profit Growth
Revenue in the Education segment rose 3%, with operating profit growing by 17% to $21.1 million, and margin expanding by 110 basis points to 9%.
Negative Updates
Margin and EPS Pressure
Strategic pricing decisions and escalation timing have pressured margins and adjusted EPS. The company expects to be at the low end of prior adjusted EPS guidance.
Challenges in Commercial Office Markets
Certain commercial office markets, particularly on the West Coast, Midwest, and Mid-Atlantic, are slow to recover, impacting growth in Business & Industry segment.
Higher Interest and Tax Expenses
Net income was impacted by higher interest and tax expenses, partially offsetting gains from lower corporate costs.
Technical Solutions Margin Decline
Despite revenue growth of 19%, the Technical Solutions segment saw a decline in operating margin to 7.8% from 8.5% last year, primarily due to business mix and higher amortization costs.
Company Guidance
During ABM Industries Incorporated's third quarter 2025 earnings call, the company provided guidance that included several key metrics. They achieved a 5% organic revenue growth and generated over $150 million in free cash flow, with $1.5 billion secured in new business bookings, representing a 15% year-over-year increase. Despite an uncertain macro environment, they maintained strong client retention and expanded their market presence, particularly in semiconductor and e-commerce sectors. The company also announced a restructuring program expected to yield at least $35 million in annual run-rate savings by year-end. For the fiscal year 2025, they project adjusted EPS to be towards the low end of $3.65 to $3.80, with anticipated fourth-quarter improvements driven by restructuring benefits and strong performance in the Technical Solutions segment.

ABM Industries Financial Statement Overview

Summary
ABM Industries shows strong revenue growth and stable profitability, with a solid balance sheet. However, cash flow management needs improvement due to negative free cash flow, which slightly impacts the overall financial performance score.
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.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue8.63B8.36B8.10B7.81B6.23B5.99B
Gross Profit1.13B1.12B1.13B1.05B970.40M830.60M
EBITDA503.20M414.40M460.60M461.10M296.10M372.50M
Net Income115.90M81.40M251.30M230.40M126.30M300.00K
Balance Sheet
Total Assets5.27B5.10B4.93B4.87B4.44B3.78B
Cash, Cash Equivalents and Short-Term Investments69.30M64.60M69.50M73.00M62.80M394.20M
Total Debt142.00M1.47B1.44B1.40B1.03B886.10M
Total Liabilities3.44B3.32B3.13B3.15B2.83B2.28B
Stockholders Equity1.83B1.78B1.80B1.72B1.61B1.50B
Cash Flow
Free Cash Flow58.00M167.30M190.70M-30.40M280.00M419.50M
Operating Cash Flow131.40M226.70M243.30M20.40M314.30M457.50M
Investing Cash Flow-88.80M-171.90M-62.10M-241.50M-740.00M-27.50M
Financing Cash Flow-61.00M-61.50M-186.30M235.50M92.40M-94.10M

ABM Industries Technical Analysis

Technical Analysis Sentiment
Negative
Last Price48.26
Price Trends
50DMA
47.93
Positive
100DMA
48.30
Negative
200DMA
49.82
Negative
Market Momentum
MACD
0.25
Positive
RSI
49.50
Neutral
STOCH
44.11
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 48.26 is below the 20-day moving average (MA) of 48.57, above the 50-day MA of 47.93, and below the 200-day MA of 49.82, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 49.50 is Neutral, neither overbought nor oversold. The STOCH value of 44.11 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$4.99B16.3217.61%1.36%3.40%13.75%
76
Outperform
$3.19B21.537.15%0.78%4.18%18.93%
76
Outperform
$12.57B37.005.86%2.57%1.56%-32.50%
70
Outperform
$2.99B39.006.32%2.11%4.27%-24.06%
67
Neutral
$10.29B28.9512.00%1.07%-0.06%3.83%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
60
Neutral
$1.37B428.663.03%-2.99%-72.13%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ABM
ABM Industries
48.26
-0.67
-1.37%
MMS
Maximus
88.25
3.20
3.76%
UNF
UniFirst
177.77
-0.09
-0.05%
ARMK
ARAMARK Holdings
38.81
1.53
4.10%
RTO
Rentokil Initial
25.55
-5.06
-16.53%
BV
BrightView Holdings
14.36
-0.21
-1.44%

ABM Industries Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
ABM Industries Reports Strong Q3 Results and Restructuring
Positive
Sep 5, 2025

On September 5, 2025, ABM Industries announced its fiscal third-quarter results, highlighting a 6.2% revenue increase to $2.2 billion, driven by organic growth and acquisitions. The company reported a significant rise in net income to $41.8 million, attributed to the absence of prior year adjustments and lower corporate costs. ABM launched a restructuring program aimed at achieving $35 million in annualized cost savings, expected to begin in the fourth quarter. The Board also approved a $150 million increase in share repurchase authorization, reflecting confidence in ABM’s strategic direction. Despite some margin pressures, the company anticipates improved fourth-quarter results and continues to invest in AI capabilities and client-facing resources.

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.

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.

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.

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: Sep 06, 2025