Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$2.26B
• Dividend Yield: 2.38%
• Average Volume (3M): 372.83K
• Price to Earnings (P/E): 270.3
• Beta (1Y): 0.79
• 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: 64,072,020
• 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$35.00
• Price Target Upside: -0.85% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 65 Neutral
• Price Target: C$38.00 ▲(7.65% 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

Backlog Strength

A record $10.8B backlog provides durable revenue visibility across multiple quarters, supporting utilization and resource planning. Large contracted work reduces near-term revenue volatility, helps secure future cash inflows, and underpins strategic bidding capacity and scale benefits.

Strategic U.S. Acquisitions

Acquisitions in the U.S. expand geographic footprint and exposure to higher-growth industrial and specialty services, diversifying revenue sources. This increases addressable market, creates cross-selling and scale synergies, and reduces reliance on a single national market over the medium term.

Contract Mix Shift

Shifting to collaborative/non-fixed price contracts (75% of backlog) reduces Aecon's pure fixed-price exposure and transfers more cost recovery to clients. This structural contract mix can improve margin resilience against inflation and execution variability, stabilizing cash conversion over time.

Negative Factors

Thin Profitability

Persistently low gross and net margins with negative operating profitability indicate structural operational and pricing challenges. This constrains retained earnings, limits reinvestment capacity, and weakens the firm's ability to absorb future cost overruns or compete on large complex projects profitably.

Operating Cash Flow Weakness

Negative TTM operating cash flow signals weak cash generation from core activities, forcing reliance on non-operational sources or external financing. Over months this undermines liquidity, reduces flexibility to fund working capital for bids, and raises refinancing and covenant risks during project cycles.

Legacy Project Execution Risk

Material legacy project losses ($21M) reveal execution and risk-management gaps that can persist until completion. Such overruns erode margins, tie up capital and management bandwidth, and can harm reputation, making future contract wins and accurate tender pricing more difficult over several quarters.

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 moderate revenue growth and a stable balance sheet, but faces challenges with profitability margins and cash flow management. The company needs to improve operational efficiency and cash flow generation.

Income Statement

Aecon Group Inc. has shown a moderate revenue growth rate of 5.2% in the TTM, recovering from a decline in the previous year. However, the gross profit margin remains low at 5.08%, and net profit margin is also thin at 0.51%. The EBIT and EBITDA margins are negative, indicating operational challenges. Despite these issues, the company has managed to turn a profit in the TTM, which is a positive sign.

Balance Sheet

The company's debt-to-equity ratio is 0.77, which is reasonable for the industry, indicating a balanced approach to leveraging. Return on equity is low at 2.68%, suggesting limited profitability from shareholders' equity. The equity ratio stands at 24.5%, reflecting a stable capital structure with a significant portion of assets financed by equity.

Cash Flow

Aecon Group Inc. faces challenges in cash flow management, with negative operating cash flow in the TTM. The free cash flow growth rate is positive at 19.05%, but the operating cash flow to net income ratio is negative, indicating cash flow issues. The free cash flow to net income ratio is high at 6.17, suggesting reliance on non-operational sources for cash generation.

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: 35.30
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

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 35.3 is above the 20-day moving average (MA) of 33.44, above the 50-day MA of 31.03, and above the 200-day MA of 23.58, indicating a bullish trend. The MACD of 1.20 indicates Negative momentum. The RSI at 66.71 is Neutral, neither overbought nor oversold. The STOCH value of 90.06 is Negative, 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$35.49B	39.25	11.21%	0.60%	18.85%	29.60%
ATRL	71 Outperform	$15.72B	6.39	56.38%	0.09%	13.97%	715.65%
STN	70 Outperform	C$15.39B	31.84	15.96%	0.67%	11.73%	41.17%
BDT	69 Neutral	C$1.67B	17.79	21.68%	2.88%	6.26%	0.52%
BDGI	66 Neutral	C$2.60B	30.50	22.05%	0.99%	13.02%	52.88%
ARE	65 Neutral	C$2.26B	270.29	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 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.

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.