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Aecom Technology Corp (ACM)
NYSE:ACM
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Aecom Technology
(NYSE:ACM)
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Rating:69Neutral
Price Target:
$107.00
▲(12.23% Upside)
Action:DowngradedDate:02/12/26
The score is driven primarily by steady-to-improving financial performance (better profitability and reliable cash generation, despite leverage and softer TTM momentum) and a very strong earnings-call update (raised guidance, record backlog/pipeline and significant buybacks). These positives are tempered by mixed technicals (short-term strength but still below long-term averages and slightly negative MACD) and a relatively higher valuation with a modest dividend yield.
Positive Factors
Record backlog and book-to-burn
A record backlog with a sustained 1.5x book-to-burn gives multi-quarter revenue visibility for project-based services. That durable backlog supports predictable revenue conversion, underwriting guidance and resource planning over the next 2–6 months.
Margin expansion and operating leverage
Sustained margin improvement driven by mix shift and tech efficiencies suggests structural operating leverage. Higher enterprise and Americas margins indicate the firm can extract more profit per project, supporting durable profitability even if top-line growth is uneven.
Consistent free cash flow generation
Reliable FCF and close tracking to net income indicate earnings quality and internal funding for capex, debt servicing and shareholder returns. This durable cash generation underpins capital allocation flexibility and resilience through near-term seasonality.
Negative Factors
Meaningful leverage reduces flexibility
A debt-to-equity ratio around 1.1–1.4x creates ongoing interest and refinancing risk and constrains strategic optionality. Over the medium term this leverage can limit M&A scope, increase sensitivity to rate moves, and pressure liquidity during weaker quarters.
TTM revenue softness and cooling momentum
Trailing-twelve-month revenue decline and margin cooling signal that demand and cash conversion have softened. If this trend persists it can erode free cash flow growth and make hitting multi-year revenue/margin targets more challenging across contracting cycles.
Retaining Construction Management creates execution risk
Keeping the CM unit preserves potential synergies but also sustains execution and integration exposure. As a project-intensive, lower-margin line (~8% of NSR), CM retention requires management focus and can dilute consolidated margins or absorb resources during complex integrations.
Aecom Technology (ACM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.33B
Dividend Yield1.06%
Average Volume (3M)1.79M
Price to Earnings (P/E)21.4
Beta (1Y)0.86
Revenue Growth0.21%
EPS Growth53.80%
CountryUS
Employees51,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.29
Shares Outstanding129,288,620
10 Day Avg. Volume2,473,686
30 Day Avg. Volume1,788,658
Financial Highlights & Ratios
PEG Ratio0.72
Price to Book (P/B)6.93
Price to Sales (P/S)1.07
P/FCF Ratio25.22
Enterprise Value/Market Cap1.21
Enterprise Value/Revenue0.93
Enterprise Value/Gross Profit12.13
Enterprise Value/Ebitda11.77
Forecast
1Y Price Target
$126.56Price Target Upside32.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)5.94
Revenue Forecast (FY)$7.84B
Aecom Technology Business Overview & Revenue Model
Company DescriptionAECOM, together with its subsidiaries, provides professional infrastructure consulting services for governments, businesses, and organizations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through three segments: Americas, International, and AECOM Capital. The company offers planning, consulting, architectural and engineering design, construction and program management, and investment and development services to commercial and government clients. It also invests in and develops real estate projects. In addition, the company provides construction services, including building construction and energy, and infrastructure and industrial construction. It serves transportation, water, government, facilities, environmental, and energy sectors. The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was incorporated in 1980 and is headquartered Dallas, Texas.
How the Company Makes MoneyAECOM generates revenue primarily through its professional services, which include consulting, design, and management services across various sectors. The company operates through two main segments: Design and Consulting Services, and Construction Management. The Design and Consulting Services segment accounts for a significant portion of revenue, as AECOM provides expertise in planning, engineering, and environmental services to public and private sector clients. The Construction Management segment focuses on overseeing large-scale construction projects, ensuring that they are completed on time and within budget. Key revenue streams include fees for services rendered, contract-based work, and project management services. AECOM also benefits from long-term contracts with government entities and international organizations, which provide a stable source of income. Additionally, partnerships with other firms and collaborations on large infrastructure projects enhance its market position and revenue potential.
Aecom Technology Earnings Call Summary
Earnings Call Date:Feb 09, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:May 11, 2026
Earnings Call Sentiment Positive
The call emphasized multiple record outcomes (record backlog, margin expansion, adjusted EBITDA and EPS beats), raised full-year guidance, significant buybacks, and tangible early success from AI and strategic wins—balanced against timing-related headwinds (federal shutdown, fewer billable days), near-term international softness in select markets, and first-half cash seasonality. Overall the positive operational outperformance, strong backlog/pipeline, guidance uplift and capital returns substantially outweigh the near-term and timing-driven challenges.Q1-2026 Updates
Positive Updates
Record Backlog and Strong Book-to-Burn
Backlog increased 9% year-over-year to an all-time high, supported by a 1.5x book-to-burn ratio and a book-to-burn above 1 for 21 consecutive quarters, providing strong near-term visibility.
Net Service Revenue Growth (Adjusted)
Net service revenue (NSR) increased 5% on a year-over-year basis after adjusting for fewer billable days, demonstrating underlying demand and revenue resilience.
Margin Expansion and Profitability
Segment adjusted operating margin rose 100 basis points to 16.4% (a first-quarter record). Americas adjusted operating margin increased 120 basis points to 19.9%, reflecting operating leverage, mix shift to higher-margin services and technology-driven efficiencies.
Strong Adjusted EBITDA and EPS
Adjusted EBITDA of $287 million and adjusted EPS of $1.29 exceeded expectations for the quarter, driving management to raise full-year guidance.
Raised Full-Year EPS Guidance
Management increased the midpoint of adjusted EPS guidance to $5.95 from $5.75 (approximately a ~3.5% uplift at the midpoint) and raised adjusted EBITDA guidance midpoints, reflecting better-than-expected quarter and backlog visibility.
Capital Return and Balance Sheet Actions
Repurchased more than $300 million in the first quarter (management also reported returning nearly $350 million to shareholders in Q1) and increased share repurchase authorization to $1.0 billion, signaling confidence in cash generation and capital allocation.
AI and Technology Integration Progress
Integration of an acquired AI technology is complete, the team size has doubled, technology is live on projects with initial performance meeting expectations, and management reported growing client traction and new use cases.
Notable New Wins and Market Positioning
Secured high-profile wins including delivery partner role for the 2032 Brisbane Olympic & Paralympic Games and a large multiyear engineering services contract for Scottish Water; data center practice grew ~50% in FY25 and defense represents ~10% of NSR, highlighting diversified demand.
International Pipeline and Backlog Momentum
International backlog grew 25% in the quarter and the overall pipeline increased (~20% year-over-year with early-stage pipeline up ~34%), indicating improving international demand after prior repositioning.
Reaffirmed Long-Term Financial Targets
Company reaffirmed long-term targets including annual revenue growth of 5%–8%, a 20% margin exit rate by fiscal 2028, and mid-teens compounded earnings and free cash flow per share growth.
Negative Updates
U.S. Federal Funding Disruption
An unprecedented 43-day U.S. federal government shutdown disrupted award activity and contributed to fewer billable days, negatively affecting timing of recognitions and comparability versus the prior year.
Fewer Billable Days Impacting Reported Growth
Management repeatedly adjusted results for fewer billable/workdays in the quarter, indicating timing-driven distortions that required normalization (company noted NSR growth was 5% when adjusted).
International Near-Term Softness
International NSR was essentially flat after adjusting for fewer billable days; management expects international segment growth to remain subdued in Q2 due to timing and regional funding/geopolitical uncertainties despite backlog/pipeline improvements.
Concentration of Near-Term Headwinds in Specific Markets
Slower activity noted in parts of the U.K., Australia Transportation (near-term pockets), and Hong Kong due to funding and geopolitical uncertainties, requiring repositioning efforts.
First-Quarter Cash Seasonality and Disbursements
Quarterly cash flow is seasonally lighter in the first half (historically ~10% of full-year cash in Q1) with sizeable near-term disbursements (compensation, 401(k), bonuses, large vendor software payments), which can create short-term cash flow variability.
Construction Management Strategic Review Outcome and Execution Risk
After reviewing strategic alternatives, management decided to retain the Construction Management (CM) business (currently ~8% of NSR). While management sees synergy upside, retaining CM preserves execution and integration risk as the company seeks closer alignment with design and program management.
Company Guidance
Management raised full‑year financial guidance following strong Q1 operational outperformance: Q1 adjusted EBITDA was $287 million and adjusted EPS $1.29, and the midpoint of FY‑26 adjusted EPS was increased to $5.95 (from $5.75 previously) while the midpoint of adjusted EBITDA guidance was also raised. They expect Q2 NSR and adjusted EBITDA to each be roughly 24% of full‑year guidance and Q2 tax rate to be ~12–13%; full‑year NSR was up 5% when adjusted for fewer billable days, enterprise segment adjusted operating margin widened 100 bps to 16.4% (Americas margin 19.9%, +120 bps) and International NSR was essentially flat (workday‑adjusted). Backlog hit an all‑time high—up 9% overall and 25% in International—with a 1.5 book‑to‑burn (above 1 for 21 consecutive quarters), pipeline +20% (early‑stage +34%), defense ≈10% of NSR, and management reiterated long‑term targets of 5–8% annual revenue growth, a 20% margin exit by FY‑28, mid‑teens compounded EPS and FCF per‑share growth, enterprise gross‑margin expansion of ~90–100 bps this year (net of tech investments ~30 bps). Capital allocation remains active: >$300M repurchased in Q1 (nearly $350M returned in the quarter), ~$3.3B returned over several years, and buyback authorization increased to $1 billion.Aecom Technology Financial Statement Overview
Summary
Profitability improved meaningfully from 2023–2025 (higher net/EBITDA margins) and cash flow is consistently positive with solid FCF-to-net-income conversion. Offsetting this, leverage is meaningful (debt-to-equity roughly ~1.1–1.4x in the periods shown) and the TTM picture shows softer momentum (slight revenue decline, some margin/FCF cooling).Income Statement
ACM shows solid profitability improvement versus the low-profit 2023 period: annual net margin rebounded from ~0.4% (2023) to ~2.5% (2024) and ~3.5% (2025), with EBIT and EBITDA margins also stepping up meaningfully. However, growth has cooled—TTM (Trailing-Twelve-Months) revenue is down ~1.1% and net margin in TTM is lower than 2025 (about 2.9% vs. 3.5%), indicating some near-term pressure despite still-healthy operating profitability for the business model.73
Positive
Balance Sheet
Leverage is meaningful: total debt is ~3.2–3.4B against equity of ~2.2–2.5B (debt-to-equity ~1.1–1.4x in the annual periods provided), which reduces balance-sheet flexibility. That said, equity remains sizable and returns on equity are strong in the last two annual reports (~18% in 2024 and ~23% in 2025), supporting the view that the company is using capital productively. A key weakness is that the TTM leverage ratio is shown as 0.0 (likely missing/invalid), so the most recent leverage read-through is less clear from the provided data.62
Positive
Cash Flow
Cash generation is consistently positive, with operating cash flow in the ~0.7–0.8B range annually and free cash flow around ~0.57–0.71B. Free cash flow tracks net income well (free cash flow is ~0.81–0.86x of net income historically; ~0.83x in TTM), which supports earnings quality. The main negatives are decelerating momentum—free cash flow growth is slightly negative in 2025 and down ~5.9% in TTM (Trailing-Twelve-Months)—and an operating-cash-flow-to-sales figure that appears low in the data, suggesting cash conversion may be a watch item.70
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 15.96B | 16.14B | 16.11B | 14.38B | 13.15B | 13.34B |
| Gross Profit | 1.23B | 1.22B | 1.08B | 945.47M | 847.97M | 798.42M |
| EBITDA | 1.27B | 1.28B | 1.08B | 548.47M | 831.84M | 823.56M |
| Net Income | 469.25M | 561.77M | 402.27M | 55.33M | 310.61M | 173.19M |
Balance Sheet | ||||||
| Total Assets | 11.94B | 12.20B | 12.06B | 11.23B | 11.14B | 11.73B |
| Cash, Cash Equivalents and Short-Term Investments | 1.25B | 1.59B | 1.58B | 1.26B | 1.17B | 1.23B |
| Total Debt | 3.84B | 3.36B | 3.03B | 2.75B | 2.80B | 2.89B |
| Total Liabilities | 9.49B | 9.50B | 9.69B | 8.85B | 8.53B | 8.90B |
| Stockholders Equity | 2.23B | 2.49B | 2.18B | 2.21B | 2.48B | 2.71B |
Cash Flow | ||||||
| Free Cash Flow | 615.95M | 684.93M | 707.89M | 590.38M | 576.62M | 568.41M |
| Operating Cash Flow | 740.73M | 821.60M | 827.49M | 695.98M | 713.64M | 704.67M |
| Investing Cash Flow | -423.30M | -413.22M | -210.64M | -138.18M | -175.03M | -421.09M |
| Financing Cash Flow | -656.57M | -403.67M | -295.46M | -472.94M | -588.32M | -872.53M |
Aecom Technology Technical Analysis
Negative
95.34
Price Trends
97.20
Negative
110.02
Negative
113.07
Negative
Market Momentum
-1.08
Positive
47.57
Neutral
37.43
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ACM, the sentiment is Negative. The current price of 95.34 is below the 20-day moving average (MA) of 96.50, below the 50-day MA of 97.20, and below the 200-day MA of 113.07, indicating a bearish trend. The MACD of -1.08 indicates Positive momentum. The RSI at 47.57 is Neutral, neither overbought nor oversold. The STOCH value of 37.43 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ACM.
Aecom Technology Risk Analysis
Aecom Technology disclosed 44 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 1 New Risks
1.
We may use artificial intelligence, machine learning, data science and similar technologies in our business, and challenges with properly managing such technologies could result in reputational harm, competitive harm, and legal liability, and adversely affect our business, financial condition and results of operations. Q3, 2025
Aecom Technology Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | $85.02B | 80.78 | 12.65% | 0.09% | 18.72% | 23.97% | |
73 Outperform | $5.13B | 13.11 | 27.77% | 1.65% | 9.66% | 29.01% | |
72 Outperform | $8.58B | 25.16 | 19.90% | 0.74% | 4.69% | -24.37% | |
70 Outperform | $15.80B | 36.17 | 12.01% | 0.94% | -23.00% | -61.88% | |
69 Neutral | $12.33B | 21.41 | 27.11% | 1.06% | 0.21% | 53.80% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
55 Neutral | $7.78B | -42.32 | -1.42% | ― | -1.81% | 1228.51% |
* Industrials Sector Average
ACM
Aecom Technology
95.34
-1.19
-1.24%
FLR
Fluor
53.10
16.29
44.25%
J
Jacobs Solutions
134.53
9.89
7.94%
KBR
KBR
40.40
-7.19
-15.11%
PWR
Quanta Services
568.21
304.12
115.16%
TTEK
Tetra Tech
32.88
2.96
9.87%
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.