Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$1.80B
• Dividend Yield: 2.77%
• Average Volume (3M): 372.83K
• Price to Earnings (P/E): 70.8
• Beta (1Y): 1.09
• Revenue Growth: 20.53%
• EPS Growth: 74.96%
• Country: CA
• Employees: 9,427
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): -0.09
• Shares Outstanding: 63,055,424
• 10 Day Avg. Volume: 309,014
• 30 Day Avg. Volume: 372,832
• PEG Ratio: 0.21
• Price to Book (P/B): 1.79
• Price to Sales (P/S): 0.40
• P/FCF Ratio: -37.48
• 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$24.22
• Price Target Upside: -14.99% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 68 Neutral
• Price Target: C$31.00 ▲(8.81% Upside)

Aecon Group Inc. scores a 68, driven primarily by strong earnings call results and positive technical indicators. The company's record backlog and strategic shift to non-fixed price contracts are significant strengths. However, financial performance concerns, particularly in cash flow and valuation, temper the overall score.

Positive Factors

Record Backlog

A record backlog of $10.7 billion provides strong revenue visibility and supports future growth, indicating robust demand for Aecon's services.

Strategic Shift to Non-Fixed Price Contracts

The shift to non-fixed price contracts enhances margin predictability and reduces risk, improving financial stability and operational efficiency.

Successful Project Launch

The successful launch of the Oneida Energy Storage Project positions Aecon as a leader in renewable energy infrastructure, expanding its market opportunities.

Negative Factors

Cash Flow Challenges

Negative operating cash flow indicates potential liquidity issues, which could constrain Aecon's ability to invest in growth and manage debt.

Thin Margins

Thin profit margins suggest ongoing challenges in operational efficiency, which may limit profitability and impact long-term financial health.

Legacy Project Challenges

Challenges with legacy projects can delay completion and strain resources, potentially affecting Aecon's ability to focus on new, profitable ventures.

Aecon Group Inc. Business Overview & Revenue Model

Company Description

Aecon Group Inc. (ARE) is a leading Canadian construction and infrastructure development company with a diverse portfolio that spans several sectors, including civil, industrial, and urban infrastructure. The company provides a wide range of services, including project management, construction, and engineering for transportation, utilities, and building projects. Aecon is known for its expertise in delivering complex infrastructure solutions and has established a strong presence in both public and private sector projects across Canada and internationally.

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

Aecon Group Inc. shows a mixed financial performance. While there is a return to profitability and strong revenue growth, margins remain thin. The balance sheet shows improved leverage but low profitability on equity. Cash flow challenges persist, with negative operating cash flow indicating potential liquidity risks.

Income Statement

Aecon Group Inc. shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 7.67%, which is a slight improvement from previous years, but still relatively low for the industry. The net profit margin is positive at 0.51%, a recovery from the negative margin in 2024, indicating a return to profitability. Revenue growth is strong at 10.05% TTM, suggesting a positive trajectory in sales. However, the EBIT and EBITDA margins remain modest at 1.51% and 3.57% respectively, reflecting ongoing challenges in operational efficiency.

Balance Sheet

The balance sheet of Aecon Group Inc. reflects moderate financial stability. The debt-to-equity ratio has improved to 0.58 TTM, indicating a reduction in leverage compared to previous years. The return on equity is low at 2.68% TTM, suggesting limited profitability relative to shareholder equity. The equity ratio stands at approximately 25.76%, showing a reasonable proportion of equity financing. Overall, the company maintains a balanced approach to financing, but profitability remains a concern.

Cash Flow

Cash flow analysis reveals challenges for Aecon Group Inc. The operating cash flow is negative at -$30.94 million TTM, indicating potential liquidity issues. Free cash flow is also negative, although it has improved by 18.95% from the previous period. The free cash flow to net income ratio is high at 2.90, suggesting that free cash flow is significantly higher than net income, which may indicate cash flow management issues. Overall, cash flow stability is a concern that needs addressing.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.91B	4.24B	4.64B	4.70B	3.98B	3.64B
Gross Profit	249.37M	182.55M	255.63M	355.96M	328.12M	311.85M
EBITDA	-12.63M	-65.06M	48.40M	129.04M	122.05M	107.27M
Net Income	24.93M	-59.52M	161.89M	30.38M	49.68M	88.03M
Balance Sheet
Total Assets	3.45B	3.23B	3.20B	3.57B	3.29B	3.29B
Cash, Cash Equivalents and Short-Term Investments	462.33M	438.02M	645.78M	485.05M	630.69M	769.48M
Total Debt	679.26M	464.72M	418.19M	909.06M	779.63M	369.16M
Total Liabilities	2.55B	2.26B	2.13B	2.61B	2.37B	2.41B
Stockholders Equity	887.83M	956.12M	1.06B	954.00M	913.57M	874.11M
Cash Flow
Free Cash Flow	-68.70M	-23.08M	46.41M	-142.39M	-63.65M	237.21M
Operating Cash Flow	-11.14M	28.65M	64.93M	-109.68M	-28.27M	274.95M
Investing Cash Flow	-201.22M	-180.66M	344.90M	-36.22M	-55.76M	-152.52M
Financing Cash Flow	180.22M	-58.26M	-141.91M	-11.86M	-52.28M	-107.26M

Aecon Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 28.49
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• 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 28.49 is above the 20-day moving average (MA) of 24.98, above the 50-day MA of 22.90, and above the 200-day MA of 20.45, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 70.08 is Negative, neither overbought nor oversold. The STOCH value of 79.13 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
MTL	―	C$1.25B	13.20	9.33%	5.85%	5.53%	-21.87%
STN	―	$17.89B	40.97	14.26%	0.56%	12.49%	26.18%
WSP	―	C$36.73B	44.88	10.52%	0.54%	18.24%	28.47%
BDT	―	C$1.64B	16.41	25.25%	2.62%	8.49%	14.10%
ATRL	―	$16.17B	6.66	57.95%	0.08%	13.07%	697.05%
ARE	―	C$1.80B	70.80	2.78%	2.77%	20.53%	74.96%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Aecon Group Inc. Corporate Events

Aecon Partnership to Deliver Advanced Nuclear Energy Facility in Washington

Aecon Group Inc., in partnership with Kiewit and Black & Veatch, has been selected to deliver Energy Northwest’s Cascade Advanced Energy Facility in Washington State. This project involves the design and construction of the first four of twelve Xe-100 small modular reactors, marking a significant step in nuclear energy infrastructure in the U.S. The initiative underscores Aecon’s strategic focus on expanding its nuclear energy capabilities and positions the company as a key player in the development of carbon-free power solutions, with construction anticipated to begin by the end of the decade.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$27.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Secures $609 Million Contract for Port of Montreal Expansion

Aecon Group Inc., in partnership with Pomerleau, has reached financial close on a $609 million design-build contract for the Port of Montreal Expansion project in Contrecoeur, Québec. This project, which is expected to commence construction in 2026 and complete by 2030, aims to enhance terminal capacity, supporting economic growth and international trade. Aecon’s involvement underscores its leadership in complex civil infrastructure projects, and the expansion will solidify the Port of Montreal’s status as a major transshipment center in Eastern Canada, connecting to key rail and highway networks.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$24.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Expands U.S. Operations with Acquisition of Trinity Industrial Services

Aecon Group Inc. has acquired Trinity Industrial Services, a company based in Beaumont, Texas, which specializes in multidisciplinary industrial services for core industrial clients in the U.S. Gulf Coast Region. This acquisition is set to expand Aecon’s industrial operations and capabilities in the U.S., enhancing client relationships and providing a growth platform in key markets. The transaction is expected to strengthen Aecon’s recurring revenue and allow for cross-selling of complementary services, thereby increasing the capacity to scale operations across the U.S. Gulf Coast Region.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$22.00 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. Schedules Q3 2025 Financial Results Release

Aecon Group Inc. has announced the release of its third quarter 2025 financial results, scheduled for October 29, 2025, after market close. A live webcast and conference call will follow on October 30, 2025, to discuss the results. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and future prospects, potentially impacting its market positioning and investor confidence.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$22.00 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. Expands U.S. Industrial Footprint with Bodell Construction Acquisition

Aecon Group Inc. has acquired Bodell Construction Company, a non-union industrial construction firm based in Salt Lake City, Utah. This acquisition strengthens Aecon’s industrial capabilities and positions it for expansion in key U.S. sectors, enhancing its relationships with major U.S. clients. The transaction is expected to diversify Aecon’s offerings across multidisciplinary sectors and support growth in the Mountain States Region and new geographic markets.

The most recent analyst rating on (TSE:ARE) stock is a Buy with a C$25.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

Aecon Secures $1.4 Billion Subway Extension Contract in Ontario

Aecon Group Inc., as part of the North End Connectors consortium, has secured a $1.4 billion contract for the Yonge North Subway Extension Advance Tunnel project in Ontario. This project, which adds $477 million to Aecon’s backlog, involves designing and constructing a 6.3-kilometre tunnel segment to extend the TTC’s Line 1 subway service, enhancing transit access and supporting economic growth in the Greater Toronto Area.

The most recent analyst rating on (TSE:ARE) stock is a Buy with a C$25.00 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. Reports Record Backlog and Revenue Growth

Aecon Group Inc.’s recent earnings call painted a picture of cautious optimism, as the company reported strong revenue growth and a record-setting backlog. While legacy projects continue to pose challenges, the overall sentiment suggests a balanced outlook with potential for improved profitability as these issues are resolved.

Aecon Group Achieves Record Backlog and Revenue Growth in Q2 2025

Aecon Group Inc. reported a record backlog of $10.7 billion for the second quarter of 2025, driven by strategic acquisitions and a robust bid pipeline. The company experienced a significant increase in revenue and operating profit compared to the previous year, attributed to reduced losses on fixed price legacy projects. Aecon is actively involved in major nuclear projects, including North America’s first commercial Small Modular Reactor, and has commenced operations on Canada’s largest grid-scale battery energy storage facility. These developments highlight Aecon’s strong market positioning and commitment to sustainable practices.

The most recent analyst rating on (TSE:ARE) stock is a Hold with a C$28.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.