Aecom Technology (ACM) AI Stock Analysis

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Aecom Technology

(NYSE:ACM)

Rating:77Outperform

Price Target:

$122.00

▲( 13.55% Upside)

AECOM's stock is positively rated due to its strong financial performance and favorable earnings call, with significant growth in revenue and profitability. The technical indicators suggest bullish momentum, though caution is advised due to overbought signals. The valuation is moderate, reflecting a fair market price. While the company faces some challenges, its strategic investments and solid backlog position it well for future growth.

Positive Factors

Earnings Guidance

Raised the low-end of its FY EBITDA & EPS guide, signaling confidence in delivering the bottom line.

Market Position

AECOM has industry-leading market share across its top end markets in a highly fragmented industry.

Profitability

Strong execution on profitability with Americas margin reaching a new high of 19.4%.

Negative Factors

Government Funding

Limited exposure to government agencies affected by funding pauses indicates minimal impact from recent policy changes.

Policy Changes

Minimal impact expected from recent policy changes due to limited exposure to affected government agencies.

Aecom Technology (ACM) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$14.42B

Dividend Yield0.88%

Average Volume (3M)978.99K

Price to Earnings (P/E)23.8

Beta (1Y)0.73

Revenue Growth4.55%

EPS GrowthN/A

CountryUS

Employees51,000

SectorIndustrials

Sector Strength90

IndustryEngineering & Construction

Share Statistics

EPS (TTM)1.25

Shares Outstanding132,300,600

10 Day Avg. Volume811,332

30 Day Avg. Volume978,991

Financial Highlights & Ratios

PEG Ratio0.75

Price to Book (P/B)6.07

Price to Sales (P/S)0.00

P/FCF Ratio18.92

Enterprise Value/Market Cap0.85

Enterprise Value/Revenue0.19

Enterprise Value/Gross Profit11.04

Enterprise Value/Ebitda3.18

Forecast

1Y Price Target

$118.93

Price Target Upside10.69% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering8

Aecom Technology Business Overview & Revenue Model

Company DescriptionAECOM Technology Corporation (ACM) is a global infrastructure consulting firm that provides professional technical and management support services. The company operates in various sectors, including transportation, facilities, environmental, energy, water, and government. AECOM offers a comprehensive range of services such as planning, consulting, architectural and engineering design, as well as program and construction management for a diverse set of clients worldwide.

How the Company Makes MoneyAECOM makes money primarily through providing professional services in areas such as planning, consulting, and engineering design. The company's revenue streams are largely derived from contracts with public and private sector clients, including governments, corporations, and non-profit organizations. AECOM engages in both long-term, large-scale projects and smaller, short-term assignments. Key revenue factors include the company's ability to secure contracts, often through competitive bidding processes, and its capacity to deliver complex, multidisciplinary projects that require integrated solutions. Additionally, partnerships and joint ventures with other firms can enhance AECOM's offerings and expand its market reach, contributing to its earnings.

Aecom Technology Financial Statement Overview

Summary

Aecom Technology exhibits a strong financial profile with robust revenue growth, effective cost management, and solid cash flow generation. The company's moderate leverage and strong return on equity indicate a well-balanced financial strategy. While profitability margins could be further improved, the current financial health supports a positive outlook for future growth and stability.

Income Statement

Very Positive

Aecom Technology demonstrates strong financial performance with consistent revenue and profit growth. The TTM (Trailing-Twelve-Months) gross profit margin is approximately 6.8%, and the net profit margin is around 2.9%. Notably, the revenue has grown by about 12.8% from the previous year, indicating robust business expansion. EBIT and EBITDA margins also show healthy operating efficiency. However, the net profit margin is relatively modest, suggesting room for improved cost management and profitability.

Balance Sheet

Positive

The balance sheet reveals a stable financial position with a debt-to-equity ratio of approximately 1.37, indicating moderate leverage. The equity ratio is around 18.6%, reflecting a balanced capital structure. Return on Equity (ROE) is approximately 21.5%, showcasing strong profitability relative to shareholder investment. However, the company’s leverage should be monitored to ensure it does not impede financial flexibility.

Cash Flow

Very Positive

Aecom Technology's cash flow performance is solid, with a notable operating cash flow to net income ratio of 1.76, indicating effective cash generation relative to net income. The free cash flow growth rate is impressive at 30.8% year-over-year, suggesting strong cash flow management. The free cash flow to net income ratio is 1.63, reflecting efficient capital expenditure and cash flow utilization. Overall, the company maintains healthy cash flow metrics, supporting ongoing operations and potential investments.

TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Breakdown
Income Statement		Total Revenue
16.22B	16.11B	14.38B	13.15B	13.34B	13.24B
	Gross Profit
1.11B	1.08B	945.47M	847.97M	798.42M	709.56M
	EBIT
917.82M	827.44M	324.13M	646.80M	629.55M	381.46M
	EBITDA
1.17B	1.07B	543.64M	826.86M	813.36M	580.02M
	Net Income Common Stockholders
474.87M	402.27M	55.33M	414.63M	319.79M	186.85M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.58B	1.58B	1.26B	1.17B	1.23B	1.71B
	Total Assets
11.82B	12.06B	11.23B	11.27B	11.85B	13.12B
	Total Debt
3.01B	3.03B	2.75B	2.80B	2.89B	2.81B
	Net Debt
1.43B	1.45B	1.49B	1.63B	1.66B	1.10B
	Total Liabilities
9.42B	9.69B	8.85B	8.66B	9.02B	9.71B
	Stockholders Equity
2.20B	2.18B	2.21B	2.48B	2.71B	3.29B
Cash Flow		Free Cash Flow
731.95M	707.89M	590.38M	576.62M	568.41M	215.03M
	Operating Cash Flow
835.52M	827.49M	695.98M	713.64M	704.67M	329.62M
	Investing Cash Flow
-148.59M	-210.64M	-138.18M	-175.03M	-421.09M	2.04B
	Financing Cash Flow
-290.51M	-295.46M	-472.94M	-588.32M	-872.53M	-1.63B

Aecom Technology Technical Analysis

Technical Analysis Sentiment

Positive

Last Price107.44

Price Trends

50DMA

97.53

Positive

100DMA

100.53

Positive

200DMA

102.25

Positive

Market Momentum

MACD

3.40

Negative

RSI

67.04

Neutral

STOCH

82.48

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACM, the sentiment is Positive. The current price of 107.44 is above the 20-day moving average (MA) of 103.53, above the 50-day MA of 97.53, and above the 200-day MA of 102.25, indicating a bullish trend. The MACD of 3.40 indicates Negative momentum. The RSI at 67.04 is Neutral, neither overbought nor oversold. The STOCH value of 82.48 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ACM.

Aecom Technology Risk Analysis

Aecom Technology disclosed 43 risk factors in its most recent earnings report. Aecom Technology reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Aecom Technology Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EME	85 Outperform	$21.04B	20.77	37.76%	0.21%	14.30%	49.19%
FIX	78 Outperform	$16.59B	28.21	37.81%	0.28%	31.47%	64.96%
ACM	77 Outperform	$14.42B	23.76	28.07%	0.88%	4.55%	―
J	72 Outperform	$15.39B	35.34	8.46%	0.93%	-22.81%	-30.13%
PWR	71 Outperform	$51.12B	55.77	13.48%	0.11%	15.77%	19.58%
MTZ	69 Neutral	$12.48B	57.35	7.70%	―	3.03%	―
Sector *	64 Neutral	$4.46B	11.94	5.17%	249.36%	4.00%	-12.35%

* Industrials Sector Average

Performance Comparison

ACM

Aecom Technology

107.44

19.08

21.59%

FIX

Comfort Systems

465.25

137.74

42.06%

EME

EMCOR Group

463.77

76.19

19.66%

Jacobs Solutions

126.31

13.35

11.82%

MTZ

MasTec

155.34

45.90

41.94%

PWR

Quanta Services

341.23

70.50

26.04%

Aecom Technology Earnings Call Summary

Earnings Call Date:May 05, 2025

(Q2-2025)

% Change Since: 5.15%|

Next Earnings Date:Aug 11, 2025

Earnings Call Sentiment Positive

The earnings call highlighted strong financial performance, record backlog, and significant cash flow increases, alongside recognition and new partnerships. However, challenges included isolated project delays and mixed trends in international markets.

Q2-2025 Updates

Positive Updates

Record Backlog and Pipeline

Backlog increased quarter-over-quarter to a new record, driven by a 1.1 times book-to-burn ratio. The pipeline of opportunities is also at a record level, supporting continued growth in largest markets.

Strong Financial Performance

Record second quarter net service revenue, margins, and EPS. Adjusted EBITDA increased by 8% to $290 million, and adjusted EPS increased by 20% to $1.25.

Significant Cash Flow Increase

Free cash flow increased by 141% to $178 million. Returned $110 million to shareholders during the quarter through share repurchases and dividends.

Industry Recognition and Olympic Project

AECOM moved up in the E&R annual survey and was appointed as the sole venue infrastructure partner for the LA 2028 Olympic and Paralympic Games.

Strong Performance in Americas

NSR growth highest in Americas, with adjusted operating margin increasing by 130 basis points to 19.4%, setting a new second quarter high.

Negative Updates

Isolated Project Delays

Experienced isolated delays and deferred decisions on a limited set of projects, impacting top line growth. These delays are not uncommon with administrative changes.

Mixed Trends in International Segment

Secular drivers are in place, but near-term trends remain mixed, particularly in the UK and Australia. Some larger transportation projects face delays.

Challenges with Fewer Workdays

Fewer workdays in the quarter due to timing of holidays reduced growth by approximately 100 basis points.

Company Guidance

During AECOM's Q2 2025 conference call, the company reported robust financial performance, highlighted by record net service revenue (NSR), margins, and earnings per share (EPS). NSR growth was notably strong in the Americas, AECOM's most profitable region, driven by increased Infrastructure Investment and Jobs Act (IIJA) spending, with less than 35% of total funding spent, suggesting sustained federal funding for infrastructure. The segment adjusted operating margin rose by 90 basis points to 16.1%, reflecting growth in higher-margin advisory services and improved execution. Adjusted EBITDA increased by 8% to $290 million, while adjusted EPS rose by 20% to $1.25. Free cash flow surged by 141% to $178 million, and $110 million was returned to shareholders. With a record backlog and a 1.1 times book-to-burn ratio, AECOM raised its EBITDA and EPS guidance midpoints for the second consecutive quarter, driven by strong market demand and strategic investments.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.