Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$1.19B
• Dividend Yield: 4.02%
• Average Volume (3M): 461.76K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.92
• Revenue Growth: 1.70%
• EPS Growth: -154.73%
• Country: CA
• Employees: 9,427
• Sector: Industrials
• Sector Strength: 92
• Industry: Engineering & Construction
• EPS (TTM): -0.54
• Shares Outstanding: 62,916,393
• 10 Day Avg. Volume: 403,226
• 30 Day Avg. Volume: 461,756
• PEG Ratio: 0.22
• Price to Book (P/B): 1.11
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.63
• 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$21.56
• Price Target Upside: 14.07% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 9

• Rating: 56 Neutral
• Price Target: C$19.50 ▲( 3.17% Upside)

Aecon Group Inc.'s overall stock score is primarily impacted by its financial challenges, including declining revenues and profitability issues. While technical indicators and corporate events provide some positive momentum, valuation concerns and mixed earnings call results weigh down the score.

Positive Factors

Earnings

Quarterly results and outlook support a reversal of the share price.

Stock Offer

An all-cash offer of $55.00 provides a short-term return for investors.

Negative Factors

Legacy Projects

Legacy project risk remains, impacting the company's future stability.

Regulatory Challenges

There is a need for tariff visibility, indicating potential regulatory challenges.

Aecon Group Inc. Business Overview & Revenue Model

Company Description

Aecon Group Inc. (ARE) is a Canadian construction and infrastructure development company. It operates in several sectors, including civil, urban transportation, nuclear, utilities, and industrial. Aecon provides a wide range of services, such as project management, design and engineering, construction, and maintenance, catering to both the public and private sectors. The company has a strong presence in Canada and engages in select international projects.

How the Company Makes Money

Aecon Group Inc. generates revenue through its diversified operations in the construction and infrastructure sectors. The company's primary revenue streams include project management and construction services for large infrastructure projects, such as highways, bridges, transit systems, and energy facilities. Additionally, Aecon is involved in the utilities sector, providing services for the construction and maintenance of pipelines and other utility infrastructure. The company also earns income from its concessions business, where it invests in and operates infrastructure assets, generating long-term revenue. Aecon's significant partnerships with government bodies and private clients across various sectors, along with its strategic alliances and joint ventures, contribute to its financial performance.

Aecon Group Inc. Financial Statement Overview

Summary

Aecon Group Inc. faces significant financial challenges with declining revenues, negative profitability, and cash flow constraints. The balance sheet remains moderately leveraged, but operational inefficiencies and cash flow issues pose risks. The company needs to focus on improving operational efficiency and cash flow generation to stabilize its financial position.

Income Statement

Aecon Group Inc. shows declining revenue and profitability margins. The TTM data indicates a negative EBIT and net income, suggesting operational challenges. Gross profit margin is also decreasing, reflecting reduced efficiency in cost management. Revenue has declined significantly from 2023, and the company has not demonstrated consistent revenue growth over the past few years.

Balance Sheet

The company's balance sheet reveals a moderate debt-to-equity ratio, indicating a balanced approach to leverage, although total debt has increased. However, the equity ratio reflects a modest portion of financing from equity. Return on equity is negative due to net losses, which highlights operational inefficiencies. The company maintains a reasonable level of cash and cash equivalents, providing some liquidity cushion.

Cash Flow

Aecon Group Inc. exhibits a volatile cash flow position with negative free cash flow in recent periods, indicating challenges in generating cash from operations after capital expenditures. The operating cash flow to net income ratio is low due to negative net income, reflecting poor cash generation relative to earnings. The free cash flow to net income ratio is also negative, underscoring cash flow management issues.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
4.46B	4.24B	4.64B	4.70B	3.98B	3.64B
	Gross Profit
118.78M	182.55M	255.63M	355.96M	366.82M	401.25M
	EBIT
-136.10M	-60.05M	240.91M	97.15M	118.81M	149.85M
	EBITDA
-4.86M	36.14M	311.36M	176.51M	192.90M	228.44M
	Net Income Common Stockholders
-91.34M	-59.52M	161.89M	30.38M	49.68M	88.03M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
433.47M	438.02M	645.78M	378.01M	532.68M	658.27M
	Total Assets
3.05B	3.23B	3.20B	3.57B	3.29B	3.29B
	Total Debt
378.19M	304.42M	418.19M	909.06M	779.63M	728.03M
	Net Debt
-55.28M	-133.61M	-227.60M	531.85M	246.95M	69.76M
	Total Liabilities
1.99B	2.26B	2.13B	2.61B	2.37B	2.41B
	Stockholders Equity
1.05B	956.12M	1.06B	954.00M	913.57M	874.11M
Cash Flow		Free Cash Flow
-61.00M	-45.67M	27.07M	-154.17M	-73.03M	133.68M
	Operating Cash Flow
6.00M	7.60M	51.07M	-112.86M	-31.41M	272.96M
	Investing Cash Flow
-187.96M	-159.61M	360.78M	-35.90M	-39.63M	-189.36M
	Financing Cash Flow
133.01M	-58.26M	-141.91M	-11.86M	-52.28M	-107.26M

Aecon Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 18.90
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• 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 18.9 is above the 20-day moving average (MA) of 17.76, above the 50-day MA of 17.41, and below the 200-day MA of 21.65, indicating a neutral trend. The MACD of 0.41 indicates Negative momentum. The RSI at 58.57 is Neutral, neither overbought nor oversold. The STOCH value of 58.22 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
BDT	81 Outperform	C$1.44B	14.36	26.31%	2.60%	16.14%	27.71%
MTL	77 Outperform	C$1.23B	11.44	10.81%	5.69%	3.28%	-14.21%
STN	76 Outperform	C$15.95B	41.33	13.13%	0.60%	15.62%	9.66%
WSP	75 Outperform	C$35.97B	50.15	9.42%	0.54%	16.77%	21.38%
ATRL	67 Neutral	$15.77B	51.34	8.66%	0.09%	12.05%	1.32%
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.39%	3.96%	-12.36%
ARE	56 Neutral	C$1.19B	―	-9.26%	4.02%	1.70%	-154.73%

Aecon Group Inc. Corporate Events

Aecon Secures Major Contract for Darlington New Nuclear Project

Aecon Group Inc., in partnership with Kiewit Nuclear Canada, has been awarded a significant contract by Ontario Power Generation for the execution phase of the Darlington New Nuclear Project in Ontario. This project, valued at approximately $1.3 billion for Aecon, involves the construction of North America’s first grid-scale Small Modular Reactor. The project is expected to be completed by 2030 and is seen as a pioneering step in nuclear energy, enhancing Aecon’s position in the nuclear construction industry and contributing to Ontario’s future energy demands.

Aecon Reports Record Backlog Amidst First Quarter Losses

Aecon Group Inc. reported a record backlog of $9.7 billion for the first quarter of 2025, indicating strong future revenue prospects despite an operating loss of $40.7 million. The company secured significant new contracts, including a major project with Ontario Power Generation and a substantial share in the Scarborough Subway Extension, which bolsters its market position and underscores its commitment to sustainable growth.

Aecon Celebrated as One of Canada’s Greenest Employers

Aecon Group Inc. has been recognized as one of Canada’s Greenest Employers and has released its 2024 Sustainability Report, highlighting its significant strides in sustainable construction. In 2024, 59% of Aecon’s revenue was tied to sustainability projects, including clean energy and urban transportation initiatives. The company achieved a 34% reduction in Scope 1 and Scope 2 emissions since 2020, surpassing its 2030 target. Aecon also emphasized its commitment to community engagement and economic prosperity, notably through its Indigenous procurement efforts, spending $127 million on goods and services from the Indigenous economy.

Aecon Group Inc. to Announce Q1 2025 Financial Results

Aecon Group Inc. announced the release of its first quarter 2025 financial results scheduled for April 23, 2025, after market close, with a live webcast and conference call planned for April 24, 2025. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction, potentially impacting its market positioning and investor relations.

Aecon Group Inc. Reports 2024 Financial Results and Strategic Developments

Aecon Group Inc. reported a year-end revenue of $4.2 billion for 2024, with a backlog of $6.7 billion, despite a decrease in revenue and operating profit compared to 2023. The company anticipates stronger revenue in 2025, driven by a robust backlog, new contract awards, and strategic acquisitions. Aecon is advancing several major long-term projects and has been added to the S&P/TSX Composite Index, highlighting its significant market presence. Recent acquisitions and new contracts, including a major nuclear project and a subway extension, are expected to bolster its operations and industry positioning.