Aecon Group Inc. (ARE) AI Stock Analysis

• Market Cap: C$1.83B
• Dividend Yield: 2.94%
• Average Volume (3M): 372.83K
• Price to Earnings (P/E): 222.1
• Beta (1Y): 0.97
• 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: 63,055,424
• 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$32.40
• Price Target Upside: 25.44% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 62 Neutral
• Price Target: C$29.00 ▲(12.27% Upside)

Aecon Group Inc.'s overall stock score reflects a mixed financial performance with strong revenue growth but thin margins and cash flow challenges. The technical analysis shows positive momentum, but valuation concerns due to a high P/E ratio weigh heavily. The earnings call provided a balanced view with growth highlights and profitability challenges.

Positive Factors

Revenue Growth

Strong revenue growth indicates Aecon's ability to capture market opportunities and expand its project portfolio, enhancing its competitive position.

Record Backlog

A record backlog provides visibility into future revenues and demonstrates strong demand for Aecon's services, supporting long-term growth.

Strategic U.S. Acquisitions

Strategic acquisitions in the U.S. expand Aecon's presence in high-growth sectors, potentially increasing market share and enhancing competitive advantage.

Negative Factors

Legacy Project Challenges

Ongoing challenges with legacy projects can strain resources and profitability, potentially affecting financial performance and operational focus.

Cash Flow Challenges

Negative cash flow highlights liquidity risks, which could limit Aecon's ability to invest in growth opportunities and meet financial obligations.

Thin Margins

Thin profit margins suggest challenges in cost management and pricing power, which may impact long-term profitability and financial resilience.

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: 25.83
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 25.83 is below the 20-day moving average (MA) of 28.28, above the 50-day MA of 25.61, and above the 200-day MA of 20.80, indicating a neutral trend. The MACD of 0.24 indicates Positive momentum. The RSI at 43.57 is Neutral, neither overbought nor oversold. The STOCH value of 7.37 is Positive, 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	78 Outperform	C$1.22B	12.83	9.33%	5.88%	5.53%	-21.87%
STN	75 Outperform	C$15.91B	32.90	15.96%	0.65%	11.73%	41.17%
WSP	73 Outperform	C$34.51B	42.90	11.21%	0.61%	18.85%	29.60%
ATRL	66 Neutral	$15.68B	6.46	56.38%	0.09%	13.97%	715.65%
BDT	64 Neutral	C$1.62B	16.39	21.68%	3.35%	6.26%	0.52%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
ARE	62 Neutral	C$1.83B	222.05	0.92%	2.94%	25.68%	―

Aecon Group Inc. Corporate Events

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 Inc. Reports Record Revenue Amid Challenges

Aecon Group Inc.’s latest earnings call presented a mixed sentiment, reflecting both remarkable achievements and ongoing challenges. The company reported record revenue and backlog, signaling robust growth and strategic expansion. However, issues with legacy projects and a decline in profitability highlighted areas of concern that need addressing.

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.

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.