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Api Group Corporation (APG)
:APG

APi Group (APG) AI Stock Analysis

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APi Group

(NYSE:APG)

Rating:76Outperform
Price Target:
$52.00
▲( 14.01% Upside)
APi Group's overall stock score is driven by strong financial performance and positive corporate events, including a stock split and an expanded credit facility. While the stock shows bullish momentum, its high P/E ratio indicates potential overvaluation, and overbought signals suggest caution. Earnings call insights highlight growth in key segments but also note challenges in the Specialty Services segment.
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.
Strategic Positioning
APi Group is the #1 provider of Fire Protection services in the United States among a broader range of Life Safety and Specialty Contracting services.
Negative Factors
Project Delays
All three large project delays in the second half of 2024 have moved forward, indicating progress and reducing investor concerns.
Valuation Concerns
Shares currently trade at 15 times our next-12-months’ EBITDA estimate, compared to the five-year average of 11 times.

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

APi Group Business Overview & Revenue Model

Company DescriptionAPi Group Corporation (APG) is a prominent provider of safety, specialty, and industrial services across various sectors, including energy, transportation, and construction. The company delivers a comprehensive range of services focusing on critical infrastructure and life safety, such as fire safety and industrial specialty services, offering solutions that enhance the safety, reliability, and efficiency of operations for businesses worldwide.
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 strong financial performance with significant revenue growth and robust profit margins. The balance sheet is solid, reflecting low debt levels and high equity, which contributes to financial stability. Cash flow management is effective, enhancing strategic flexibility. The company should focus on improving net margins and monitoring liabilities to maintain financial health.
Income Statement
85
Very Positive
APi Group exhibits strong revenue growth with a TTM (Trailing-Twelve-Months) increase to $7.136 billion from the previous year. The gross profit margin remains healthy at around 30%, indicating efficient cost management. EBIT and EBITDA margins are solid, signaling operational efficiency. However, the slight decline in net profit margin suggests room for improvement in net earnings management.
Balance Sheet
78
Positive
The balance sheet reflects a robust equity position, with a debt-to-equity ratio significantly improved to near zero in the TTM period, due to decreased debt levels. The equity ratio is strong, showcasing financial stability. Return on equity is trending positively, although modest. The company's high equity levels indicate financial resilience, though the potential risk of liabilities should be monitored.
Cash Flow
82
Very Positive
Operating cash flow is strong, with a positive trend in free cash flow growth. The free cash flow to net income ratio is robust, highlighting effective cash management. The operating cash flow to net income ratio suggests efficient conversion of profits into cash. The cash position supports strategic investments and financial flexibility, although past volatility in investing cash flow should be considered.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.14B7.02B6.93B6.56B3.94B3.59B
Gross Profit
2.17B2.18B1.94B1.71B939.00M756.00M
EBIT
475.00M484.00M359.00M162.00M136.00M31.00M
EBITDA
781.00M484.00M680.00M532.00M338.00M131.00M
Net Income Common Stockholders
240.00M250.00M153.00M73.00M47.00M-153.00M
Balance SheetCash, Cash Equivalents and Short-Term Investments
460.00M499.00M479.00M605.00M1.19B515.00M
Total Assets
8.10B8.15B7.59B8.09B5.16B4.07B
Total Debt
3.04B3.04B2.57B3.03B1.87B1.54B
Net Debt
2.58B2.54B2.10B2.42B685.00M1.03B
Total Liabilities
5.12B5.20B4.72B5.96B2.84B2.51B
Stockholders Equity
2.98B2.95B2.87B2.13B2.32B1.56B
Cash FlowFree Cash Flow
601.00M536.00M428.00M191.00M127.00M458.00M
Operating Cash Flow
675.00M620.00M514.00M270.00M182.00M496.00M
Investing Cash Flow
-821.00M-829.00M-115.00M-2.90B-121.00M-340.00M
Financing Cash Flow
360.00M245.00M-532.00M1.76B917.00M99.00M

APi Group Technical Analysis

Technical Analysis Sentiment
Positive
Last Price45.61
Price Trends
50DMA
38.86
Positive
100DMA
38.23
Positive
200DMA
36.67
Positive
Market Momentum
MACD
2.29
Positive
RSI
74.00
Negative
STOCH
34.96
Neutral
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 45.61 is above the 20-day moving average (MA) of 43.51, above the 50-day MA of 38.86, and above the 200-day MA of 36.67, indicating a bullish trend. The MACD of 2.29 indicates Positive momentum. The RSI at 74.00 is Negative, neither overbought nor oversold. The STOCH value of 34.96 is Neutral, 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 2 New Risks
1.
We are implementing new enterprise resource planning systems. Our failure to implement such systems successfully, on time and on budget could have a material adverse effect on us. Q4, 2024
2.
Changes in spending or budgetary priorities or delays in contract awards may materially adversely affect our business, financial condition and results of operations. Q4, 2024

APi Group Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
FIFIX
79
Outperform
$16.31B27.7337.81%0.29%31.47%64.96%
ACACM
77
Outperform
$14.24B23.4728.07%0.89%4.55%
APAPG
76
Outperform
$12.84B89.669.09%3.20%
BLBLD
75
Outperform
$7.99B14.1524.59%1.46%-0.37%
71
Outperform
$9.33B51.0111.91%0.65%10.35%-29.34%
MTMTZ
69
Neutral
$12.03B56.287.70%3.03%
64
Neutral
$4.39B11.815.20%249.38%3.96%-12.36%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
APG
APi Group
45.61
9.20
25.27%
ACM
Aecom Technology
107.60
19.48
22.11%
FIX
Comfort Systems
471.50
130.53
38.28%
MTZ
MasTec
152.45
40.24
35.86%
TTEK
Tetra Tech
35.45
-7.93
-18.28%
BLD
TopBuild
279.65
-129.93
-31.72%

APi Group Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 20.57%|
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

Private Placements and FinancingStock Split
APi Group Announces Three-for-Two Stock Split
Positive
May 22, 2025

On May 20, 2025, APi Group DE, Inc., a subsidiary of APi Group Corporation, executed Amendment No. 8 to its Credit Agreement, increasing its revolving credit facility by $250 million to $750 million and extending its maturity date. The amendment also reduced interest margins and removed the credit spread adjustment, potentially lowering borrowing costs. On May 21, 2025, APi Group announced a three-for-two stock split of its common stock, effective June 30, 2025, which could enhance stock liquidity and accessibility for investors.

The most recent analyst rating on (APG) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on APi Group stock, see the APG Stock Forecast page.

Stock SplitBusiness Operations and StrategyFinancial Disclosures
APi Group Announces Stock Split and Financial Targets
Positive
May 21, 2025

On May 21, 2025, APi Group Corporation announced new long-term financial targets and a three-for-two stock split. The company aims for $10 billion in net revenues and a 16% adjusted EBITDA margin by 2028, supported by a strong start in 2025. The stock split will increase the number of outstanding common shares to approximately 415 million, enhancing shareholder value.

The most recent analyst rating on (APG) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on APi Group stock, see the APG Stock Forecast page.

Executive/Board ChangesShareholder Meetings
APi Group Holds Virtual Annual Meeting, Key Votes Approved
Positive
May 19, 2025

On May 16, 2025, APi Group held its Annual Meeting virtually, where shareholders voted on several key issues. The election of nine director nominees for a one-year term was approved, along with the ratification of KPMG LLP as the independent registered public accounting firm for the 2025 fiscal year. Additionally, shareholders approved the compensation of the company’s named executive officers and an amendment to increase the number of authorized shares of common stock. These decisions reflect strong shareholder support for the company’s current leadership and strategic direction.

The most recent analyst rating on (APG) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on APi Group stock, see the APG Stock Forecast page.

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.

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.