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APi Group Corporation (APG)
NYSE:APG

APi Group (APG) AI Stock Analysis

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AP

APi Group

(NYSE:APG)

77Outperform
APi Group's strong revenue growth and operational improvements drive a favorable outlook, despite current profitability challenges. Technical indicators are positive, supporting the stock's upward momentum. Valuation is hampered by negative earnings, but strategic initiatives and recent corporate events provide a robust framework for future growth. The overall stock score reflects a balanced view of strengths and challenges.
Positive Factors
Earnings
Shares finished the day up more than 6% following better-than-expected first-quarter results and positive commentary surrounding the growth outlook and demand trends.
Financial Performance
Revenue grew 7.4% to $1.72 billion, above the consensus estimate of $1.66 billion.
Growth Strategy
APG is poised to deliver organic growth, annual margin expansion, and EPS growth.
Negative Factors
Economic Conditions
Recently introduced pricing escalators and the statutory-driven nature of APi’s services should help insulate the company should economic conditions deteriorate.
Project Delays
All three large project delays in the second half of 2024 have moved forward, indicating progress and reducing investor concerns.

APi Group (APG) vs. S&P 500 (SPY)

APi Group Business Overview & Revenue Model

Company DescriptionAPi Group Corporation provides safety, specialty, and industrial services in North America, Europe, Australia, and the Asian-Pacific. It operates through three segments: Safety Services, Specialty Services, and Industrial Services. The Safety Services segment offers safety solutions focusing on end-to-end integrated occupancy systems, such as fire protection solutions; heating, ventilation, and air conditioning solutions; and entry systems, which include the design, installation, inspection, monitoring, and service of these integrated systems. The Specialty Services segment provides infrastructure and specialized industrial plant services, including maintenance and repair of underground electric, gas, water, sewer, and telecommunications infrastructure. This segment also offers engineering and design, fabrication, installation, and retrofitting and upgrading services. The Industrial Services segment provides various services and solutions comprising pipeline infrastructure, access and road construction, supporting facilities, and integrity management and maintenance to the energy industry focused on transmission and distribution. It serves customers in the public and private sectors, including commercial, industrial, fulfillment centers, distribution, manufacturing, education, healthcare, telecom, transmission, utilities, high tech, entertainment, retail, financial services, and governmental markets. The company was formerly known as J2 Acquisition Limited and changed its name to APi Group Corporation in October 2019. APi Group Corporation was founded in 1926 and is headquartered in New Brighton, Minnesota.
How the Company Makes MoneyAPi Group makes money through a diversified revenue model centered around its extensive portfolio of services. The company generates income by providing specialized services that include fire protection, life safety, and infrastructure maintenance. These services are offered under long-term contracts and project-based agreements, ensuring a steady stream of revenue. Key revenue streams include installation and maintenance of fire protection systems, industrial specialty services, and safety solutions. Strategic acquisitions and partnerships bolster APi Group's market position, allowing it to expand its service offerings and geographic reach, thus contributing significantly to its earnings.

APi Group Financial Statement Overview

Summary
APi Group demonstrates significant revenue growth and operational improvements, yet faces profitability challenges as reflected in the net income losses. Strong cash flow generation and improved financial leverage highlight operational resilience, but strategic measures are needed to enhance net profitability and shareholder value.
Income Statement
78
Positive
APi Group shows a strong revenue growth trend with a compound annual growth rate (CAGR) in revenue over the past few years. However, the net profit margin is concerning due to the negative net income in the most recent period, despite a positive trajectory in EBIT and EBITDA margins. This indicates operational efficiency improvements but highlights underlying profitability challenges.
Balance Sheet
70
Positive
The balance sheet reflects a solid equity base with a decreasing debt-to-equity ratio over time, suggesting improved leverage management. However, the return on equity (ROE) is impacted by recent net losses, affecting overall shareholder returns. The company's equity ratio remains stable, indicating a balanced asset financing structure.
Cash Flow
85
Very Positive
The cash flow statement reveals strong operational cash generation, with substantial growth in free cash flow. The company efficiently converts operating profits into cash, as evidenced by a robust operating cash flow to net income ratio. This positions APi Group well for future investments and debt servicing.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.02B6.93B6.56B3.94B3.59B
Gross Profit
2.18B1.94B1.71B939.00M756.00M
EBIT
484.00M359.00M162.00M136.00M31.00M
EBITDA
484.00M680.00M532.00M338.00M131.00M
Net Income Common Stockholders
250.00M153.00M73.00M47.00M-153.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
499.00M479.00M605.00M1.19B515.00M
Total Assets
8.15B7.59B8.09B5.16B4.07B
Total Debt
4.00M2.57B3.03B1.87B1.54B
Net Debt
-495.00M2.10B2.42B685.00M1.03B
Total Liabilities
5.20B4.72B5.96B2.84B2.51B
Stockholders Equity
2.95B2.87B2.13B2.32B1.56B
Cash FlowFree Cash Flow
536.00M428.00M191.00M127.00M458.00M
Operating Cash Flow
620.00M514.00M270.00M182.00M496.00M
Investing Cash Flow
-829.00M-115.00M-2.90B-121.00M-340.00M
Financing Cash Flow
245.00M-532.00M1.76B917.00M99.00M

APi Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price40.34
Price Trends
50DMA
36.65
Positive
100DMA
37.10
Positive
200DMA
36.00
Positive
Market Momentum
MACD
0.62
Negative
RSI
68.31
Neutral
STOCH
91.52
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APG, the sentiment is Positive. The current price of 40.34 is above the 20-day moving average (MA) of 35.39, above the 50-day MA of 36.65, and above the 200-day MA of 36.00, indicating a bullish trend. The MACD of 0.62 indicates Negative momentum. The RSI at 68.31 is Neutral, neither overbought nor oversold. The STOCH value of 91.52 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APG.

APi Group Risk Analysis

APi Group disclosed 47 risk factors in its most recent earnings report. APi Group 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

APi Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
ACACM
80
Outperform
$13.30B28.5226.35%0.93%8.89%669.67%
FIFIX
78
Outperform
$14.75B25.0837.81%0.34%31.47%64.96%
APAPG
77
Outperform
$11.30B9.09%1.30%-36.24%
MTMTZ
76
Outperform
$10.60B65.215.80%2.56%
BLBLD
75
Outperform
$8.73B14.7026.09%2.60%5.15%
73
Outperform
$8.37B32.5816.05%0.74%11.02%11.33%
63
Neutral
$4.21B11.555.28%250.72%4.13%-9.42%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
APG
APi Group
42.32
5.37
14.53%
ACM
Aecom Technology
102.35
8.57
9.14%
FIX
Comfort Systems
432.10
118.28
37.69%
MTZ
MasTec
134.01
32.21
31.64%
TTEK
Tetra Tech
30.98
-10.33
-25.01%
BLD
TopBuild
301.21
-101.31
-25.17%

APi Group Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 6.63%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Positive
APi Group's earnings call reflected a positive outlook with record revenues and strong performance in the Safety Services segment. The company is well-positioned with a growing backlog and a robust share repurchase program. However, challenges remain in the Specialty Services segment with declining revenues and margin pressures.
Q1-2025 Updates
Positive Updates
Record Net Revenues and Profitability
APi Group achieved record first quarter net revenues of $1.72 billion, a 7.4% increase compared to the prior year. Adjusted EBITDA increased by 10.3%, with a margin of 11.2%.
Safety Services Segment Growth
Safety Services reported a 13.4% increase in revenues to $1.27 billion, with 5.6% organic growth driven by double-digit inspection revenue growth in North America.
Strong Backlog and Future Growth
Backlog increased by 7% organically, positioning the company for positive organic growth in the second quarter.
Share Repurchase Program
APi repurchased $75 million or 2.1 million shares of common stock and authorized a new $1 billion share repurchase program.
Negative Updates
Specialty Services Revenue Decline
Specialty Services reported a 6.8% decrease in revenues to $453 million, driven by an anticipated decrease in project and service revenues and adverse weather impacts.
Gross Margin Pressure in Specialty Services
Adjusted gross margin for Specialty Services decreased by 150 basis points to 16.8% due to lower fixed cost absorption.
Company Guidance
During APi Group's first quarter 2025 earnings call, the company outlined several key metrics and strategic goals. The company reported a 7.4% increase in revenues, reaching $1.72 billion, driven by organic growth of approximately 2%. The Safety Services segment saw organic growth of 5.6%, while the Specialty Services segment experienced a 6.8% decrease in revenues. The adjusted EBITDA margin increased by 30 basis points to 11.2%, supported by a 100 basis point increase in adjusted gross margin to 31.7%. APi Group reaffirmed its commitment to the 13/60/80 value creation targets: achieving a 13% adjusted EBITDA margin, 60% of revenues from inspection, service, and monitoring, and an 80% adjusted free cash flow conversion. The company also highlighted an increase in backlog, up 7% organically, and discussed the impact of tariffs, noting no significant material impact on 54% of net revenues from recurring services. APi further announced a $1 billion share repurchase program and continued its M&A strategy, targeting $250 million in bolt-on acquisitions for 2025. Adjusted diluted earnings per share rose by 8.8% to $0.37, and the company maintained a strong balance sheet with a net leverage ratio of 2.3x.

APi Group Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
APi Group Appoints David Jackola as CFO
Positive
Mar 31, 2025

APi Group Corporation announced the appointment of David Jackola as Executive Vice President and Chief Financial Officer, effective March 28, 2025. Jackola, who has been with the company since October 2021, previously served as Interim CFO and has extensive experience in global finance. His appointment is expected to support APi’s strategic objectives and enhance its leadership as the company aims to return to traditional levels of organic growth in 2025 and beyond.

Private Placements and FinancingFinancial Disclosures
APi Group’s Successful Loan Refinancing Boosts Financial Outlook
Positive
Feb 19, 2025

On February 14, 2025, APi Group DE, Inc., a subsidiary of APi Group Corporation, successfully refinanced its existing incremental term loans through an amendment to its credit agreement, involving approximately $2,157 million with a maturity date of January 3, 2029. This refinancing, which reduces the applicable margin and saves the company approximately $5 million annually, maintains the existing interest rate swaps. Additionally, APi Group announced its 2024 financial performance and 2025 guidance, with expectations of net revenues between $7,300 to $7,500 million and adjusted EBITDA between $970 to $1,020 million, reflecting a 13.4% adjusted EBITDA margin. The company also noted its strong balance sheet and plans for growth, indicating continued momentum in service revenues and organic growth in project revenues.

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.