Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$2.02B
• Dividend Yield: 2.38%
• Average Volume (3M): 372.83K
• Price to Earnings (P/E): 237.9
• Beta (1Y): 0.89
• Revenue Growth: 25.68%
• EPS Growth: N/A
• Country: CA
• Employees: 9,427
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.53
• Shares Outstanding: 63,287,174
• 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: -74.17
• 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$33.11
• Price Target Upside: 6.57% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: C$34.00 ▲(9.43% Upside)

Aecon Group Inc.'s stock score is primarily driven by strong technical momentum and strategic growth initiatives, as evidenced by record revenue and backlog. However, high valuation concerns and profitability challenges weigh on the score.

Positive Factors

Record Revenue Growth

The significant revenue growth reflects Aecon's strong market position and ability to secure large-scale projects, indicating robust demand for its services.

Record Backlog

A record backlog provides visibility into future revenue streams and suggests sustained business growth, enhancing long-term stability.

Strategic U.S. Acquisitions

These acquisitions expand Aecon's presence in high-growth sectors, potentially increasing its competitive advantage and market share.

Negative Factors

Legacy Project Challenges

Ongoing issues with legacy projects can strain resources and profitability, posing risks to operational efficiency and financial health.

Decrease in Adjusted EBITDA

A decline in EBITDA indicates reduced operational profitability, which can affect the company's ability to reinvest in growth opportunities.

Cash Flow Management Challenges

Negative operating cash flow suggests difficulties in sustaining operations through core business activities, impacting financial flexibility.

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

Aecon Group Inc. shows a mixed financial picture. The income statement indicates a return to profitability with strong revenue growth, but margins remain thin. The balance sheet reflects improved leverage and a stable equity position, yet profitability on equity is low. Cash flow challenges persist, with negative operating cash flow highlighting 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	5.16B	4.24B	4.64B	4.70B	3.98B	3.64B
Gross Profit	205.79M	182.55M	255.63M	355.96M	328.12M	311.85M
EBITDA	-13.50M	-65.06M	48.40M	129.04M	122.05M	107.27M
Net Income	8.47M	-59.52M	161.89M	30.38M	49.68M	88.03M
Balance Sheet
Total Assets	3.74B	3.23B	3.20B	3.57B	3.29B	3.29B
Cash, Cash Equivalents and Short-Term Investments	390.84M	438.02M	645.78M	485.05M	630.69M	769.48M
Total Debt	616.78M	464.72M	418.19M	909.06M	779.63M	369.16M
Total Liabilities	2.82B	2.26B	2.13B	2.61B	2.37B	2.41B
Stockholders Equity	916.05M	956.12M	1.06B	954.00M	913.57M	874.11M
Cash Flow
Free Cash Flow	-81.79M	-23.08M	46.41M	-142.39M	-63.65M	237.21M
Operating Cash Flow	-27.37M	28.65M	64.93M	-109.68M	-28.27M	274.95M
Investing Cash Flow	-116.91M	-180.66M	344.90M	-36.22M	-55.76M	-152.52M
Financing Cash Flow	31.94M	-58.26M	-141.91M	-11.86M	-52.28M	-107.26M

Aecon Group Inc. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 31.07
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 Positive. The current price of 31.07 is below the 20-day moving average (MA) of 31.34, above the 50-day MA of 29.32, and above the 200-day MA of 22.21, indicating a neutral trend. The MACD of 0.80 indicates Positive momentum. The RSI at 54.54 is Neutral, neither overbought nor oversold. The STOCH value of 47.68 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
WSP	75 Outperform	C$33.57B	38.21	11.21%	0.60%	18.85%	29.60%
ATRL	71 Outperform	$15.18B	6.09	56.38%	0.09%	13.97%	715.65%
STN	70 Outperform	$15.52B	31.78	15.96%	0.67%	11.73%	41.17%
BDT	69 Neutral	C$1.64B	17.52	21.68%	2.88%	6.26%	0.52%
BDGI	66 Neutral	C$2.42B	29.68	22.05%	0.99%	13.02%	52.88%
ARE	65 Neutral	C$2.02B	237.90	0.92%	2.38%	25.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Aecon Group Inc. Corporate Events

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.

Aecon Utilities to Acquire KPC, Enhancing Infrastructure Capabilities

Aecon Group Inc.’s subsidiary, Aecon Utilities, has agreed to acquire KPC, a contractor specializing in high-voltage testing, commissioning, and metering solutions in Ontario. This acquisition is expected to enhance Aecon’s relationships with key clients, increase recurring revenue, and expand its expertise and capacity, positioning the company to capitalize on opportunities in grid modernization and infrastructure upgrades.

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 Group Reports Strong Revenue Growth and Record Backlog in Q3 2025

Aecon Group Inc. reported a 20% increase in revenue for the third quarter of 2025, reaching $1,530 million, despite a decrease in operating profit due to negative gross profit on fixed price legacy projects. The company achieved a record backlog of $10,777 million, driven by strategic acquisitions and significant project wins, including a partnership for a small modular reactor project in the U.S. Aecon’s recent acquisitions of Bodell Construction Company and Trinity Industrial Services are expected to enhance its capabilities in industrial construction and maintenance services.

The most recent analyst rating on (TSE:ARE) stock is a Buy with a C$26.00 price target. To see the full list of analyst forecasts on Aecon Group Inc. stock, see the TSE:ARE Stock Forecast page.

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.