ABM Industries (ABM) AI Stock Analysis

• Market Cap: $3.20B
• Dividend Yield: 1.91%
• Average Volume (3M): 519.21K
• Price to Earnings (P/E): 40.5
• Beta (1Y): 0.87
• Revenue Growth: 2.81%
• EPS Growth: -67.57%
• Country: US
• Employees: 100,000
• Sector: Industrials
• Sector Strength: 90
• Industry: Specialty Business Services
• EPS (TTM): 0.87
• Shares Outstanding: 62,231,438
• 10 Day Avg. Volume: 329,593
• 30 Day Avg. Volume: 519,210
• PEG Ratio: -50.23
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 54.33
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 0.14
• Enterprise Value/Gross Profit: 1.62
• Enterprise Value/Ebitda: 3.07
• 1Y Price Target: $59.00
• Price Target Upside: 14.90% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5

• Rating: 74 Outperform
• Price Target: ―

ABM Industries is performing well with strong revenue growth and operational stability. However, challenges such as declining margins and cash flow pressures are notable risks. Positive momentum and a successful earnings call provide optimism, although high valuation remains a concern.

Positive Factors

Earnings

ABM reported revenue and operating EPS above expectations, indicating strong financial performance.

Future Earnings

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

Negative Factors

Market Reaction

Shares traded down roughly 8% as investors balanced an improving CRE market against a decline in free cash flow.

Profitability

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

ABM Industries Business Overview & Revenue Model

Company Description

ABM 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 Money

ABM 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 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
2.93B	977.40M	1.13B	977.00M	925.50M	782.20M
	EBIT
215.40M	212.00M	409.50M	348.80M	206.30M	278.30M
	EBITDA
325.40M	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
64.60M	64.60M	69.50M	73.00M	62.80M	394.20M
	Total Assets
5.10B	5.10B	4.93B	4.87B	4.44B	3.78B
	Total Debt
1.45B	1.45B	1.44B	1.40B	1.03B	886.10M
	Net Debt
1.39B	1.39B	1.37B	1.33B	969.80M	491.90M
	Total Liabilities
3.32B	3.32B	3.13B	3.15B	2.83B	2.28B
	Stockholders Equity
1.78B	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: Positive
• Last Price: 51.35
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 51.35 is above the 20-day moving average (MA) of 50.57, above the 50-day MA of 48.18, and below the 200-day MA of 51.74, indicating a neutral trend. The MACD of 1.11 indicates Negative momentum. The RSI at 58.93 is Neutral, neither overbought nor oversold. The STOCH value of 52.20 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ABM.

ABM Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
UNF	84 Outperform	$3.30B	22.95	7.17%	0.73%	5.04%	31.69%
MMS	76 Outperform	$4.15B	14.66	17.36%	1.63%	5.29%	31.95%
RTO	75 Outperform	$11.70B	30.00	7.44%	2.21%	3.96%	-17.48%
BV	74 Outperform	$1.52B	85.78	2.56%	―	-2.85%	-108.99%
ABM	74 Outperform	$3.20B	40.50	4.46%	1.91%	2.81%	-67.57%
ARMK	71 Outperform	$10.19B	29.92	11.77%	1.03%	-3.47%	-45.03%
Sector *	64 Neutral	$4.39B	11.81	5.17%	249.38%	3.98%	-12.17%

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.