Education
About Us
Working with TipRanks
Follow Us
AtkinsRealis (TSE:ATRL)
TSX:ATRL
Top Page
AtkinsRealis
(TSX:ATRL)
67Neutral
Positive Factors
Acquisition Strategy
The acquisition of a 70% stake in engineering services firm David Evans is viewed positively both strategically and financially, aligning well with ATRL's U.S. Land & Expand strategy and significantly bolstering ATRL's Western U.S. presence.
Financial Performance
The company's Q4/2024 Services revenue increased by 15.1% year-over-year to $2.52 billion, exceeding estimates by 10%.
Resource Allocation
The sale of its remaining stake in Highway 407 provides significant resources to be redeployed across its capital allocation priorities.
Negative Factors
Earnings Decline
PS&PM adjusted EPS decreased by 43% year-over-year, missing the estimate of $0.47 and the consensus of $0.53.
Earnings Miss
Q4/24 PS&PM EBITDA missed consensus, and 2025 CFO guidance is weaker than expected.
Project Losses
LSTK project losses increased due to greater-than-anticipated project commissioning costs on the Ottawa LRT and Eglinton LRT scheduling delays and additional provisions.
AtkinsRealis (ATRL) vs. S&P 500 (SPY)
Market Cap
$11.86B
Dividend Yield0.12%
Average Volume (3M)634.95K
Price to Earnings (P/E)41.9
Beta (1Y)1.12
Revenue Growth12.20%
EPS Growth-0.98%
CountryCA
Employees38,446
SectorIndustrials
Sector Strength70
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.62
Shares Outstanding174,843,060
10 Day Avg. Volume626,936
30 Day Avg. Volume634,946
Financial Highlights & Ratios
PEG Ratio0.28
Price to Book (P/B)N/A
Price to Sales (P/S)1.30
Price to Cash Flow (P/CF)11.40
P/FCF Ratio11.60
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$95.22Price Target Upside40.33% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering10
AtkinsRealis Business Overview & Revenue Model
Company DescriptionSNC-Lavalin Group Inc. operates as an integrated professional services and project management company. It operates through Engineering, Design, and Project Management (EDPM); Nuclear; Infrastructure Services; Resources; Infrastructure EPC (Engineering, Procurement, and Construction) Projects; and Capital segments. The EDPM segment provides consultancy, engineering, design, and project management services for the transportation, civil infrastructure, aerospace, defense and security, and technology sectors. The Nuclear segment supports clients across the nuclear life cycle with the spectrum of services, such as consultancy, field, technology, reactor support and decommissioning, and waste management services, as well as EPC management services. This segment also offers new-build and full refurbishment services for reactors; and spare parts. The Infrastructure Services segment undertakes operations and maintenance projects; and provides EPC services for district cooling plants and power substations. This segment also offers engineering solutions for the hydro, transmission and distribution, renewables, energy storage, and intelligent networks and cybersecurity sectors. The Resources segment provides project development, delivery, and support services primarily to the mining and metallurgy sector, as well as Build-Own-Operate contract services. The Infrastructure EPC Projects segment undertakes construction contracts for the mass transit, heavy rail, roads, bridges, airports, ports and harbors, and water infrastructure sectors. The Capital segment invests in infrastructure concessions, such as bridges and highways, mass transit systems, power facilities, energy infrastructure, water treatment plants, and social infrastructure. It has operations in the Asia Pacific, the United Kingdom, Europe, the Middle East, and the Americas. SNC-Lavalin Group Inc. was founded in 1911 and is headquartered in Montreal, Canada.
How the Company Makes MoneyAtkinsRealis generates revenue primarily through its consulting and engineering services, which are offered to both public and private sector clients worldwide. The company earns money by providing specialized expertise in project management, design, and engineering, often through long-term contracts and partnerships. Key revenue streams include fees for planning and designing infrastructure projects, managing complex construction initiatives, and offering strategic advisory services to improve operational efficiency. Additionally, AtkinsRealis may engage in joint ventures or partnerships to expand its service offerings and enhance its market reach, further contributing to its earnings.
AtkinsRealis Financial Statement Overview
Summary
AtkinsRealis demonstrates strong revenue growth and improved gross profit margins, but faces challenges with operational efficiency, reflected in declining EBIT. The balance sheet is stable with a moderate debt-to-equity ratio. Cash flows are improving, yet volatility in the free cash flow to net income ratio poses potential challenges.Income Statement
AtkinsRealis has demonstrated consistent revenue growth over recent years, with a notable increase in gross profit margin, indicating improved cost management. However, the company has faced challenges with EBIT, showing a decline in profitability from core operations recently. The net profit margin has improved, but the inconsistency in EBIT signals operational efficiency issues that could affect future profitability.70
Positive
Balance Sheet
The balance sheet of AtkinsRealis is solid with a moderate debt-to-equity ratio, indicating a balanced approach to leverage. The equity ratio is stable, reflecting a solid foundation of assets relative to equity. However, the return on equity has shown variability, suggesting fluctuating profitability returns to shareholders.75
Positive
Cash Flow
Cash flow analysis reveals a positive trend in free cash flow growth, reflecting improved cash management. Operating cash flow has shown improvement, supporting net income, but the free cash flow to net income ratio remains volatile, indicating potential challenges in converting income into cash.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 9.67B | 8.63B | 7.55B | 7.37B | 7.01B | Gross Profit |
| 844.84M | 766.00M | 413.11M | 489.31M | 125.35M | EBIT |
| 0.00 | 506.62M | 195.78M | 235.27M | -185.90M | EBITDA |
| 768.97M | 752.00M | 283.59M | 383.82M | -14.32M | Net Income Common Stockholders |
| 283.87M | 287.21M | 9.75M | 666.56M | -965.45M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 805.85M | 540.64M | 645.06M | 680.24M | 1.08B | Total Assets |
| 11.29B | 10.17B | 9.46B | 9.88B | 10.34B | Total Debt |
| 2.20B | 2.37B | 2.49B | 2.16B | 2.50B | Net Debt |
| 1.53B | 1.90B | 1.92B | 1.55B | 1.57B | Total Liabilities |
| 7.50B | 6.99B | 6.58B | 6.88B | 7.77B | Stockholders Equity |
| 3.77B | 3.16B | 2.87B | 2.97B | 2.56B |
| Cash Flow | Free Cash Flow | |||
| 365.86M | -25.82M | -355.19M | 27.91M | 45.66M | Operating Cash Flow |
| 525.78M | 65.96M | -245.36M | 134.20M | 121.48M | Investing Cash Flow |
| 70.27M | 9.48M | -82.47M | -263.71M | -185.12M | Financing Cash Flow |
| -408.35M | -170.91M | 283.12M | -192.53M | -190.43M |
AtkinsRealis Technical Analysis
Neutral
67.85
Price Trends
69.17
Negative
72.11
Negative
65.25
Positive
Market Momentum
-0.23
Negative
46.02
Neutral
29.96
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATRL, the sentiment is Neutral. The current price of 67.85 is below the 20-day moving average (MA) of 68.06, below the 50-day MA of 69.17, and above the 200-day MA of 65.25, indicating a neutral trend. The MACD of -0.23 indicates Negative momentum. The RSI at 46.02 is Neutral, neither overbought nor oversold. The STOCH value of 29.96 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TSE:ATRL.
AtkinsRealis Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Performance Comparison
TSE:ATRL
AtkinsRealis
67.85
13.70
25.30%
STN
Stantec
85.35
6.31
7.98%
BDRBF
Bombardier
58.08
16.82
40.77%
TSE:ARE
Aecon Group Inc.
16.96
0.94
5.87%
TSE:WSP
WSP Global
240.41
31.73
15.21%
AtkinsRealis Earnings Call Summary
Earnings Call Date: Mar 13, 2025 | % Change Since: 4.96% | Next Earnings Date: May 15, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong performance in revenue growth and backlog, particularly in the nuclear and services segments. Strategic moves like the sale of Highway 407 and the acquisition of David Evans are aligned with the company's focus on growth in core areas. However, there were significant challenges related to LSTK projects and some regional revenue declines, which slightly tempered the overall positive developments.Highlights
Record High Revenue and Backlog
AtkinsRéalis Services generated a record high revenue of $9.3 billion in 2024, representing more than a 15% organic growth. The backlog for AtkinsRéalis Services totaled more than $17 billion at the end of the year, a growth of more than 25% compared to the end of 2023.
Nuclear Segment Growth
Nuclear revenue organically grew 64% to $464 million in the quarter, reaching a record high. The nuclear backlog increased to $3.2 billion, more than 70% higher than the backlog as of December 31, 2023.
Successful Strategic Transactions
The company signed an agreement for the sale of its interest in Highway 407, expected to generate approximately $2.8 billion, aligning with its strategic focus on engineering services and nuclear business.
Strong Cash Flow Generation
The company generated more than $500 million in net cash from operating activities in 2024, highlighting its cash-generating nature.
Expansion and Acquisitions
The acquisition of David Evans Enterprises is expected to enhance the company's presence on the West Coast of the U.S. and is aligned with the strategy to acquire firms with strong local customer relationships.
Lowlights
Challenges with LSTK Projects
The company recognized negative adjusted EBIT of $84 million due to elevated commissioning costs on the Trillium Line project and provisions related to future delays on the Eglinton project.
Decline in Engineering Services Regions Revenue
Engineering Services regions' revenue declined 3% to $1.7 billion, attributed to very strong fourth quarter growth in 2023 and the closeout of major projects.
Flat Organic Revenue Growth in Canada
Organic revenue growth was flat for the year in Canada, with a contraction of 11% for the fourth quarter due to the completion of a project earlier in 2024.
Temporary Decline in U.K. Revenue
Organic revenue growth in the U.K. was flat in the fourth quarter due to temporary government project pipeline uncertainty, leading to award deferrals in some markets.
Company Guidance
During AtkinsRéalis' Fourth Quarter 2024 Results Conference Call, the company highlighted significant financial and operational achievements, providing guidance for 2025. The company reported record high revenue of $9.3 billion for AtkinsRéalis Services, reflecting more than 15% organic growth with a segment adjusted EBIT to segment revenue ratio exceeding 9%. The backlog reached over $17 billion, a growth of more than 25% from the previous year. The nuclear segment achieved a 64% organic growth, with revenue hitting a record high of $464 million. The company generated over $500 million in net cash from operating activities and added 1,350 new employees. For 2025, AtkinsRéalis anticipates organic revenue growth of 7% to 9% in engineering services, with an adjusted EBITDA margin of 16% to 17%. The nuclear segment is expected to continue growing, with revenue between $1.6 billion and $1.7 billion and an adjusted EBIT margin of 12% to 14%. The call also addressed strategic initiatives, such as the sale of the company's interest in Highway 407, organizational changes, and the acquisition of David Evans Enterprises to enhance their U.S. presence.AtkinsRealis Corporate Events
M&A Transactions
AtkinsRéalis to Divest Remaining Stake in Highway 407 ETR for $2.79 Billion
Neutral
Mar 13, 2025
AtkinsRéalis Group Inc. has announced the sale of its remaining 6.76% interest in Highway 407 ETR, a toll highway in Ontario, Canada, to Ferrovial and CPP Investments for up to $2.79 billion. This strategic divestment is structured in two main transactions: a 5.06% interest sold to Ferrovial and a 1.70% interest to CPP Investments. The transactions are expected to close in the second quarter of 2025, contingent on customary conditions and the closing of related sales by CPP Investments.
Business Operations and StrategyFinancial Disclosures
AtkinsRéalis Achieves Record-High Revenue and Strong Growth in 2024
Positive
Mar 13, 2025
AtkinsRéalis reported a successful fourth quarter of 2024, achieving record-high revenues in its nuclear segment and strong operating cash flows. The company also announced a record-high services backlog, reflecting robust demand for its offerings. With a 15% organic revenue growth in its services, AtkinsRéalis has a strong financial position and low debt, allowing for future growth investments. The company successfully delivered the Trillium Line project in Ottawa and concluded its Pivoting to Growth Strategy, entering a new phase focused on excellence and growth.
M&A TransactionsBusiness Operations and Strategy
AtkinsRéalis to Acquire Majority Stake in David Evans Enterprises
Positive
Feb 18, 2025
AtkinsRéalis has announced its acquisition of a 70% stake in David Evans Enterprises, Inc., aiming to establish a robust growth platform in the Western US. This move aligns with AtkinsRéalis’ US Land and Expand strategy, enhancing its geographical footprint and service capabilities. The partnership leverages both firms’ strengths, particularly in the transportation sector, and is expected to close in the first half of 2025. The acquisition will significantly expand AtkinsRéalis’ US workforce and position it as a leading player in the Western US market, delivering comprehensive solutions and driving long-term value.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.