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AtkinsRealis (TSE:ATRL)
TSX:ATRL

AtkinsRealis (ATRL) AI Stock Analysis

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AtkinsRealis

(TSX:ATRL)

Rating:67Neutral
Price Target:
C$91.00
▼(-0.95%Downside)
AtkinsRealis has strong growth prospects, driven by significant achievements in its Nuclear segment and backlog growth. However, operational efficiency concerns, high valuation, and mixed technical indicators temper the outlook. The stock is positioned well for growth, but improvements in operational efficiency are needed to enhance profitability.
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.
Nuclear Segment Performance
Nuclear EBIT increased by 36% year-over-year, exceeding estimates by 17%, with revenue reaching a record high of $464 million.
Revenue Growth
The company's Q4/2024 Services revenue increased by 15.1% year-over-year to $2.52 billion, exceeding estimates by 10%.
Negative Factors
Financial Performance
Q4/24 PS&PM EBITDA missed consensus, and 2025 CFO guidance is weaker than expected.
LSTK Project Challenges
LSTK project losses increased due to greater-than-anticipated project commissioning costs on the Ottawa LRT and Eglinton LRT scheduling delays and additional provisions.
User Growth
Continued weakness in monthly active user growth is expected.

AtkinsRealis (ATRL) vs. iShares MSCI Canada ETF (EWC)

AtkinsRealis Business Overview & Revenue Model

Company DescriptionAtkinsRealis (ATRL) is a leading global engineering and project management consultancy that operates primarily in the infrastructure, transportation, energy, and water sectors. The company provides a wide range of services including engineering design, project management, consulting, and advisory services aimed at delivering sustainable and innovative solutions for complex projects. By leveraging its expertise and global reach, AtkinsRealis supports clients in developing, managing, and maintaining infrastructure assets worldwide.
How the Company Makes MoneyAtkinsRealis makes money through a diversified revenue model that includes consultancy fees, project management contracts, and engineering services. The company generates income by providing end-to-end solutions for infrastructure development and management, often engaging in long-term contracts with governmental, private, and public sector clients. Key revenue streams include design and advisory services, where the company applies its engineering expertise to help clients plan and execute projects efficiently. Additionally, AtkinsRealis benefits from strategic partnerships and collaborations with industry leaders, enhancing its ability to secure large-scale projects and expand its market presence. The company's focus on sustainable and innovative solutions also positions it favorably in sectors experiencing growth due to increased investment in infrastructure and environmental resilience.

AtkinsRealis Earnings Call Summary

Earnings Call Date:May 15, 2025
(Q1-2025)
|
% Change Since: 20.99%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mix of significant achievements, particularly in the Nuclear segment with record growth and backlog, and challenges, notably in the Engineering Services and specific regional markets. The strong performance in key areas such as Nuclear and Linxon, along with positive cash flow and a robust balance sheet, offer a positive outlook. However, the declines in certain segments and regions temper the overall sentiment.
Q1-2025 Updates
Positive Updates
Organic Revenue Growth in AtkinsRéalis Services
AtkinsRéalis Services experienced significant organic revenue growth of 10% to $2.5 billion.
Record High Nuclear Revenue
Nuclear revenue grew 77% organically to a quarterly record high of $538 million.
Linxon Revenue Increase
Linxon revenue organically grew 36%, continuing its strong volume momentum from 2024.
Backlog Growth
AtkinsRéalis achieved a 32% increase in backlog over the prior year, driven by growth in the Nuclear and Engineering Services sectors.
Positive Operating Cash Flow
The company reported $39 million of positive operating cash flow this quarter.
Strong Balance Sheet
The balance sheet remains strong with a 1.1 times net leverage ratio at the low end of the long-term target range.
Increased Full Year Nuclear Revenue Outlook
The full year revenue outlook for Nuclear was raised to a range of $1.9 billion to $2 billion.
Negative Updates
Decline in Engineering Services Revenue
Engineering Services regions revenue organically declined 4% to $1.7 billion.
Challenges in Canadian Market
Revenue in Canada declined 14% organically in the first quarter, mainly due to the completion of a large project in 2024.
Revenue Decline in AMEA
Revenue in AMEA declined 9% on an organic basis, with a 12% decrease in backlog versus Q1 2024.
Decrease in US Revenue
US revenue organically declined 1% year-over-year, due to a decrease in the global Minerals and Metals sector.
Company Guidance
During the AtkinsRéalis First Quarter 2025 Results Conference Call, the company reported strong financial metrics, including a 10% organic revenue growth to $2.5 billion in the AtkinsRéalis Services, with Nuclear revenue surging 77% to a record $538 million. The Engineering Services regions, however, faced a 4% decline to $1.7 billion. The company achieved a 20% increase in adjusted EBIT to $224 million, contributing to a positive operating cash flow of $39 million and maintaining a net leverage ratio of 1.1 times. A significant backlog growth of 32% was noted, driven by Nuclear and Engineering Services, with a total backlog reaching $20.4 billion, a 31% increase year-over-year. The company's strategic focus remains on infrastructure and energy transition projects, highlighted by contracts for nuclear reactor life extensions and significant transportation projects in North America and the UK. The Nuclear business raised its full-year revenue guidance to $1.9 billion to $2 billion, anticipating further growth with a projected annual revenue of $2.2 billion to $2.5 billion by 2027.

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
70
Positive
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.
Balance Sheet
75
Positive
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.
Cash Flow
65
Positive
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.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
9.67B8.63B7.55B7.37B7.01B
Gross Profit
844.84M766.00M413.11M489.31M125.35M
EBIT
0.00506.62M195.78M235.27M-185.90M
EBITDA
768.97M752.00M283.59M383.82M-14.32M
Net Income Common Stockholders
283.87M287.21M9.75M666.56M-965.45M
Balance SheetCash, Cash Equivalents and Short-Term Investments
805.85M540.64M645.06M680.24M1.08B
Total Assets
11.29B10.17B9.46B9.88B10.34B
Total Debt
2.20B2.37B2.49B2.16B2.50B
Net Debt
1.53B1.90B1.92B1.55B1.57B
Total Liabilities
7.50B6.99B6.58B6.88B7.77B
Stockholders Equity
3.77B3.16B2.87B2.97B2.56B
Cash FlowFree Cash Flow
365.86M-25.82M-355.19M27.91M45.66M
Operating Cash Flow
525.78M65.96M-245.36M134.20M121.48M
Investing Cash Flow
70.27M9.48M-82.47M-263.71M-185.12M
Financing Cash Flow
-408.35M-170.91M283.12M-192.53M-190.43M

AtkinsRealis Technical Analysis

Technical Analysis Sentiment
Positive
Last Price91.87
Price Trends
50DMA
74.71
Positive
100DMA
73.14
Positive
200DMA
68.93
Positive
Market Momentum
MACD
5.36
Negative
RSI
78.62
Negative
STOCH
85.86
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:ATRL, the sentiment is Positive. The current price of 91.87 is above the 20-day moving average (MA) of 84.69, above the 50-day MA of 74.71, and above the 200-day MA of 68.93, indicating a bullish trend. The MACD of 5.36 indicates Negative momentum. The RSI at 78.62 is Negative, neither overbought nor oversold. The STOCH value of 85.86 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:ATRL.

AtkinsRealis Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSBDT
81
Outperform
C$1.51B15.0426.31%2.48%16.14%27.71%
TSSTN
76
Outperform
C$16.42B42.5513.13%0.58%15.62%9.66%
TSWSP
75
Outperform
C$35.82B49.949.42%0.55%16.77%21.38%
70
Outperform
C$1.53B22.9519.89%1.58%10.97%24.27%
67
Neutral
$15.83B51.828.66%0.08%12.05%1.32%
66
Neutral
$4.48B12.245.32%248.54%4.09%-12.10%
TSARE
55
Neutral
C$1.21B-9.26%3.96%1.70%-154.73%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:ATRL
AtkinsRealis
91.87
37.77
69.82%
TSE:STN
Stantec
144.52
31.86
28.28%
TSE:BDGI
Badger Infrastructure Solutions
44.40
2.36
5.61%
TSE:BDT
Bird Construction
26.91
3.30
13.98%
TSE:ARE
Aecon Group Inc.
18.84
2.82
17.60%
TSE:WSP
WSP Global
277.27
69.45
33.42%

AtkinsRealis Corporate Events

Business Operations and StrategyFinancial Disclosures
AtkinsRéalis Achieves Record Q1 2025 Results with Strong Nuclear Growth
Positive
May 15, 2025

AtkinsRéalis reported strong financial results for the first quarter of 2025, with significant increases in revenue, Segment Adjusted EBIT, and diluted earnings per share. The company’s backlog reached record-high levels, driven by robust demand in its Engineering Services Regions, Nuclear, and Linxon segments. The nuclear segment, in particular, saw a substantial increase in revenue and backlog, highlighting the company’s strong market positioning in this area. The acquisition of David Evans and the integration of its team further bolster AtkinsRéalis’ capabilities and workforce. The company also raised its full-year 2025 revenue outlook for the nuclear segment, reflecting continued confidence in market demand.

The most recent analyst rating on (TSE:ATRL) stock is a Buy with a C$64.00 price target. To see the full list of analyst forecasts on AtkinsRealis stock, see the TSE:ATRL Stock Forecast page.

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.

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.