Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$2.69B
• Dividend Yield: 2.38%
• Average Volume (3M): 372.83K
• Price to Earnings (P/E): 130.2
• Beta (1Y): 0.57
• Revenue Growth: 25.68%
• EPS Growth: N/A
• Country: CA
• Employees: 9,427
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.52
• Shares Outstanding: 64,072,020
• 10 Day Avg. Volume: 309,014
• 30 Day Avg. Volume: 372,832
• PEG Ratio: -1.04
• Price to Book (P/B): 2.14
• Price to Sales (P/S): 0.36
• P/FCF Ratio: 32.88
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: C$42.96
• Price Target Upside: 2.14% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6
• EPS Forecast (FY): 1.61
• Revenue Forecast (FY): C$5.79B

• Rating: 70 Outperform
• Price Target: C$44.00 ▲(4.61% Upside)
• Action: Reiterated Date: 03/07/26
• Date: Action: Reiterated 03/07/26

The score is supported by improving fundamentals and upbeat guidance/backlog momentum from the latest earnings call, reinforced by strong technical uptrends and a low P/E. Offsetting these positives are still-thin profitability and a history of volatile earnings and cash flow, which keep the financial-performance component from scoring higher.

Positive Factors

Large backlog and award momentum

A $10.7B backlog with $9.5B of 2025 awards provides multi-year revenue visibility and backlog-funded work. Large, complex awards like Scarborough evidence competitive bidding capability and scale, lowering near-term revenue risk and supporting stable utilization of capacity over several years.

Sector and geographic diversification

A structural shift toward power, utilities, and U.S./international markets reduces reliance on cyclical civil work. Higher exposure to utility and nuclear work and growing recurring utility revenues increase revenue stickiness, raise technical barriers to entry, and support steadier margins over a multi‑year horizon.

Improved liquidity and capital position

Stronger liquidity and a large undrawn revolving facility enhance financial flexibility to fund working capital, bid on large projects, execute M&A, and absorb closeout costs. Limited near‑term maturities reduce refinancing risk and support disciplined capital allocation over the next several years.

Negative Factors

Volatile profitability and cash flow

Aecon's earnings and cash generation have swung materially across years, reflecting project execution sensitivity. Thin net profits and intermittent negative free cash flow constrain internal funding, increase reliance on liquidity buffers, and elevate the operational execution premium required to sustain margins.

Residual legacy project losses

Although improved, material legacy fixed‑price losses remain and are still being wound down. Ongoing closeout risk can produce unpredictable cost and cash impacts, pressuring margins and diverting management attention from new growth initiatives if further overruns or claims occur.

Booking normalization and timing risk of large opportunities

An outsized 2025 bookings year may not repeat, so backlog-driven growth could slow. Large strategic programs (nuclear, SMRs, Arctic) have lengthy timelines, delaying material revenue recognition and exposing near-term growth to normalized award cadence and timing mismatches.

Aecon Group Inc. Business Overview & Revenue Model

Company Description

Aecon Group Inc., together with its subsidiaries, provide construction and infrastructure development services to private and public sector clients in Canada, the United States, and internationally. It operates through two segments, Construction and Concessions. The Construction segment focuses primarily on the civil infrastructure, urban transportation systems, nuclear power infrastructure, utility infrastructure, and conventional industrial infrastructure market sectors. The Concessions segment engages in the development, building, construction, financing, and operation of construction projects by way of public-private partnership contract structures. The company was formerly known as Prefac Concrete Co. Ltd. and changed its name to Aecon Group Inc. in June 2001. Aecon Group Inc. was founded in 1877 and is headquartered in Toronto, Canada.

How the Company Makes Money

Aecon Group Inc. generates revenue primarily through its construction services, which include bidding on and executing large-scale projects in civil, industrial, and infrastructure sectors. The company's revenue model is driven by fixed-price and cost-plus contracts, allowing it to earn income based on project completion and milestones. Key revenue streams include public sector contracts (such as government infrastructure projects), private sector contracts (including commercial and industrial developments), and maintenance services. Aecon often partners with government agencies, municipalities, and private companies to secure contracts, enhancing its ability to win projects. Additionally, the company may generate revenue through joint ventures and collaborations with other firms, leveraging their combined expertise and resources.

Aecon Group Inc. Financial Statement Overview

Summary

Financials indicate a recovery but with uneven quality. Revenue rebounded in 2025 and the company returned to a small profit after a 2024 loss, while leverage is moderate for the industry. However, earnings and cash flow have been volatile across years, debt rose in 2025, and profitability remains thin versus stronger prior periods—highlighting execution and margin risk typical of project-driven construction.

Income Statement

Revenue rebounded strongly in 2025 to ~$5.43B (up ~5% year over year) after a weaker 2024, showing demand resilience. However, profitability is thin and volatile: 2024 posted a meaningful loss, while 2025 returned to a small profit (~$15M) with modest operating earnings, well below 2023’s stronger profitability (~$162M net income). The overall picture is improving top-line momentum but inconsistent earnings power and margin pressure, which is typical risk in project-driven construction businesses.

Balance Sheet

Leverage looks manageable for the industry, with debt generally below equity in recent years (2024 debt-to-equity ~0.49; 2023 ~0.39), though debt increased in 2025 (to ~$601M) while equity dipped modestly versus 2024. Total assets expanded to ~$4.0B in 2025, suggesting a larger operating base, but returns on equity have been highly uneven (strong in 2023, negative in 2024), indicating execution and profitability swings that can strain the balance sheet if repeated.

Cash Flow

Cash generation is positive in 2025 with operating cash flow of ~$127M and free cash flow of ~$60M, a clear improvement from 2024’s negative free cash flow. That said, cash flow has been volatile over the cycle (notably negative operating cash flow in 2021–2022 and negative free cash flow in 2024), and 2025 free cash flow declined versus the prior year’s level per the provided growth figure. Overall, liquidity generation is recovering but consistency remains a key concern.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	5.43B	4.24B	4.64B	4.70B	3.98B
Gross Profit	287.64M	182.55M	255.63M	355.96M	328.12M
EBITDA	149.44M	-65.06M	48.40M	129.04M	122.05M
Net Income	15.16M	-59.52M	161.89M	30.38M	49.68M
Balance Sheet
Total Assets	3.99B	3.23B	3.20B	3.57B	3.29B
Cash, Cash Equivalents and Short-Term Investments	486.02M	438.02M	645.78M	485.05M	630.69M
Total Debt	600.70M	464.72M	418.19M	909.06M	779.63M
Total Liabilities	3.06B	2.26B	2.13B	2.61B	2.37B
Stockholders Equity	921.74M	956.12M	1.06B	954.00M	913.57M
Cash Flow
Free Cash Flow	60.05M	-23.08M	46.41M	-142.39M	-63.65M
Operating Cash Flow	126.62M	28.65M	64.93M	-109.68M	-28.27M
Investing Cash Flow	-89.92M	-180.66M	344.90M	-36.22M	-55.76M
Financing Cash Flow	14.54M	-58.26M	-141.91M	-11.86M	-52.28M

Aecon Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 42.06
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ARE, the sentiment is Positive. The current price of 42.06 is above the 20-day moving average (MA) of 39.84, above the 50-day MA of 37.03, and above the 200-day MA of 27.16, indicating a bullish trend. The MACD of 1.60 indicates Negative momentum. The RSI at 63.28 is Neutral, neither overbought nor oversold. The STOCH value of 79.91 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ARE.

Aecon Group Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ATRL	73 Outperform	$14.52B	5.72	56.38%	0.09%	13.97%	715.65%
ARE	70 Outperform	C$2.69B	130.21	1.66%	2.38%	25.68%	―
WSP	70 Outperform	C$29.27B	33.67	10.86%	0.60%	18.85%	29.60%
STN	66 Neutral	$13.54B	30.82	15.28%	0.67%	11.73%	41.17%
BDT	64 Neutral	C$1.95B	33.32	21.42%	2.88%	6.26%	0.52%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BDGI	61 Neutral	C$2.05B	29.89	24.10%	0.99%	13.02%	52.88%

Aecon Group Inc. Corporate Events

Aecon Adds Veteran Nuclear and Power Executive Jeff Lyash to Board

Aecon Group Inc. has appointed veteran nuclear and power executive Jeff Lyash to its Board of Directors, effective immediately, with plans for him to stand for election at the company’s next annual meeting on June 1, 2026. His appointment is intended to strengthen Aecon’s strategic focus on growth in the nuclear and power sectors, leveraging his four decades of industry and leadership experience to enhance the board’s expertise and support the company’s long-term value creation for shareholders and stakeholders.

Lyash’s extensive background includes senior roles at Tennessee Valley Authority, Ontario Power Generation, Chicago Bridge & Iron Power, Duke Energy, Progress Energy and Progress Energy Florida, alongside board experience at Dominion Energy and Granite Construction. Aecon’s leadership underscored that his technical, regulatory and governance credentials, combined with his ongoing involvement in major energy institutions, are expected to bolster the company’s positioning as it pursues large-scale infrastructure and energy-related opportunities across North America.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$35.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon-Led Partnership Secures Key Role in Arctic Over-the-Horizon Radar Project

Aecon Group Inc., together with partners Pomerleau and Stantec, has signed an agreement with Defence Construction Canada to deliver Stage 1 of the Arctic Over-the-Horizon Radar Program in Ontario under an Integrated Project Delivery model. An Aecon-led 50/50 joint venture with Pomerleau will manage project delivery, with a validation phase starting in the first quarter of 2026, followed by design development and anticipated construction, positioning Aecon at the center of a critical NORAD modernization initiative to renew Canada’s North Warning System and enhance long-range surveillance of North America’s northern approaches.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$35.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Sets March 2026 Date for Q4 and Year-End 2025 Results and Investor Call

Aecon Group Inc. has scheduled the release of its fourth quarter and full-year 2025 financial results for March 5, 2026, after the market close, followed by a live webcast and conference call on March 6, 2026. The company will also provide an accompanying investor presentation and make a replay of the call available, underscoring its continued emphasis on investor communication and transparency around its financial performance and strategic progress.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$30.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Utilities Closes Acquisition of High-Voltage Specialist KPC to Boost Grid Modernization Play

Aecon Group Inc.’s utilities subsidiary has closed the acquisition of KPC, an Ontario-based contractor specializing in high-voltage testing, commissioning and energy metering solutions, bolstering Aecon Utilities’ technical capabilities in grid-focused services. Management said the deal strengthens Aecon’s position to capture growing opportunities in grid modernization, electrification and infrastructure upgrades and supports its strategy for sustainable growth in the utilities sector, potentially enhancing its recurring revenue base and competitive standing with utility customers in Canada and the U.S.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$34.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Group Inc. Declares Quarterly Dividend

Aecon Group Inc. announced that its Board of Directors has approved a quarterly dividend of 19 cents per share, payable on January 5, 2026, to shareholders of record as of December 24, 2025. This decision reflects Aecon’s ongoing commitment to delivering value to its shareholders and may positively impact investor confidence in the company’s financial stability and market positioning.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$34.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.