Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$1.18B
• Dividend Yield: 4.05%
• Average Volume (3M): 331.95K
• Price to Earnings (P/E): ―
• Beta (1Y): 0.87
• Revenue Growth: 20.53%
• EPS Growth: 74.96%
• Country: CA
• Employees: 9,427
• Sector: Industrials
• Sector Strength: 88
• Industry: Engineering & Construction
• EPS (TTM): -0.09
• Shares Outstanding: 63,055,424
• 10 Day Avg. Volume: 304,680
• 30 Day Avg. Volume: 331,946
• PEG Ratio: 0.27
• Price to Book (P/B): 1.39
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -20.85
• 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$22.00
• Price Target Upside: 13.75% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 48 Neutral
• Price Target: C$18.50 ▼(-4.34%Downside)

Aecon Group Inc. faces significant financial and operational challenges, reflected in the poor financial performance and negative technical indicators. Although the company has achieved some positive developments, such as revenue growth and a strong backlog, these are overshadowed by ongoing issues with legacy projects and negative profitability. The stock's valuation is also impacted by negative earnings, contributing to a lower overall score.

Positive Factors

Earnings

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

Financial Leverage

Asset sales lowered financial leverage, while the joint venture with Oaktree has the potential to be a growth platform focused on the utilities sector.

Operational Strength

Solid quarterly results demonstrate the company's operational strength.

Negative Factors

Financial Performance

Earnings continue to be pressured by legacy fixed price projects and sluggish margins in other divisions of the Construction segment.

Legacy Projects

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

Tariff Impact

The potential impact of tariffs on material costs and/or availability add another risk to the near-term earnings outlook.

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 various construction and infrastructure projects. The company secures contracts for large-scale projects in sectors such as transportation, utilities, and industrial installations, where it is responsible for the design, construction, and sometimes the financing of these projects. Aecon's revenue streams include project-based payments, long-term service agreements, and concessions where they operate infrastructure assets. Significant partnerships with government entities and private sector clients also contribute to its earnings, as these relationships often lead to sustained project pipelines and recurring revenue opportunities.

Aecon Group Inc. Financial Statement Overview

Summary

Aecon Group Inc. faces financial challenges with declining revenues, negative profitability, and cash flow constraints. The balance sheet is moderately leveraged, but operational inefficiencies and cash flow issues pose risks.

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	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	4.24B	4.64B	4.70B	3.98B	3.64B
Gross Profit	182.55M	255.63M	355.96M	366.82M	401.25M
EBITDA	36.14M	311.36M	176.51M	192.90M	228.44M
Net Income	-59.52M	161.89M	30.38M	49.68M	88.03M
Balance Sheet
Total Assets	3.23B	3.20B	3.57B	3.29B	3.29B
Cash, Cash Equivalents and Short-Term Investments	438.02M	645.78M	378.01M	532.68M	658.27M
Total Debt	304.42M	418.19M	909.06M	779.63M	728.03M
Total Liabilities	2.26B	2.13B	2.61B	2.37B	2.41B
Stockholders Equity	956.12M	1.06B	954.00M	913.57M	874.11M
Cash Flow
Free Cash Flow	-45.67M	27.07M	-154.17M	-73.03M	133.68M
Operating Cash Flow	7.60M	51.07M	-112.86M	-31.41M	272.96M
Investing Cash Flow	-159.61M	360.78M	-35.90M	-39.63M	-189.36M
Financing Cash Flow	-58.26M	-141.91M	-11.86M	-52.28M	-107.26M

Aecon Group Inc. Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 19.34
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• 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 Neutral. The current price of 19.34 is below the 20-day moving average (MA) of 19.82, below the 50-day MA of 19.60, and below the 200-day MA of 21.60, indicating a bearish trend. The MACD of -0.23 indicates Positive momentum. The RSI at 46.30 is Neutral, neither overbought nor oversold. The STOCH value of 40.75 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ARE.

Aecon Group Inc. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	64 Neutral	$10.64B	16.52	6.24%	2.15%	3.01%	-28.89%
ARE	48 Neutral	C$1.18B	―	2.78%	4.05%	20.53%	74.96%
STN	―	$12.47B	44.98	13.13%	0.57%	―	―
SNCAF	―	$11.68B	55.21	8.66%	0.08%	―	―
BDT	79 Outperform	C$1.60B	15.91	26.31%	2.65%	16.14%	27.71%
WSP	78 Outperform	C$37.24B	51.92	9.42%	0.53%	16.77%	21.38%
MTL	72 Outperform	C$1.15B	11.48	9.99%	6.43%	5.52%	-18.01%

Aecon Group Inc. Corporate Events

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.

Aecon Group Inc. Schedules Q2 2025 Financial Results Release

Aecon Group Inc. has announced the release of its second quarter 2025 financial results, scheduled for July 31, 2025, after market close. A live webcast and conference call will follow on August 1, 2025, at 9 a.m. Eastern Time. This announcement is significant for stakeholders as it provides insights into the company’s financial health and performance, potentially impacting its market positioning and investor relations.

The most recent analyst rating on (TSE:ARE) stock is a Buy 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. Announces AGM Results and Dividend Declaration

Aecon Group Inc. announced the results of its Annual General Meeting, where all nominated directors were elected, and key resolutions, including executive compensation and auditor re-appointment, were approved by shareholders. Monica Sloan retired from the board after 12 years of service. The board also declared a quarterly dividend of 19 cents per share, payable on July 3, 2025. These developments reflect Aecon’s ongoing commitment to governance and shareholder value, potentially impacting its market position and stakeholder relations positively.

The most recent analyst rating on (TSE:ARE) stock is a Buy 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 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.