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Stantec Inc (TSE:STN)
TSX:STN
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Stantec
(TSX:STN)
Select Model
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Rating:70Outperform
Price Target:
C$149.00
▲(7.06% Upside)
Stantec's overall stock score is driven by strong financial performance and positive earnings call highlights, indicating robust growth and profitability. However, technical analysis shows bearish momentum, and the valuation suggests the stock may be overvalued, which tempers the overall score.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective execution, supporting long-term financial stability and expansion.
Cash Flow Management
Strong cash flow growth enhances financial flexibility, enabling strategic investments and resilience against economic fluctuations.
Market Position
High EBITDA margins reflect operational efficiency and competitive strength, positioning the company well in the engineering and consulting industry.
Negative Factors
Federal Contracting Challenges
Delays in federal contracts can impact backlog growth and revenue visibility, posing risks to future project pipelines and financial performance.
Backlog Growth Concerns
Flat backlog growth in key markets may limit future revenue potential and indicates challenges in securing new projects amidst procurement delays.
Debt Levels
While manageable, maintaining debt levels requires careful cash flow management to avoid financial strain and ensure continued investment capacity.
Stantec (STN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
$15.73B
Dividend Yield0.67%
Average Volume (3M)333.86K
Price to Earnings (P/E)32.5
Beta (1Y)0.86
Revenue Growth11.73%
EPS Growth41.17%
CountryCA
Employees32,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.53
Shares Outstanding114,066,990
10 Day Avg. Volume338,494
30 Day Avg. Volume333,858
Financial Highlights & Ratios
PEG Ratio3.17
Price to Book (P/B)4.37
Price to Sales (P/S)2.19
P/FCF Ratio25.52
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue2.88
Enterprise Value/Gross Profit5.64
Enterprise Value/Ebitda20.29
Forecast
1Y Price Target
$171.38Price Target Upside23.13% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
EPS Forecast (FY)6.04
Revenue Forecast (FY)$7.14B
Stantec Business Overview & Revenue Model
Company DescriptionStantec Inc. provides engineering, architecture, and environmental consulting services in the areas of infrastructure and facilities in Canada, the United States, and internationally. The company provides consulting services in engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics. It also offers structural, mechanical, electrical, plumbing, and hydraulics engineering services; transportation advisory, planning and analytics, transport engineering, and technical design; paleontological and archaeological services for the rail, transportation, water, and power and energy sectors; environmental and infrastructure services; and environmental and cultural resource compliance services. The company was formerly known as Stanley Technology Group Inc. and changed its name to Stantec Inc. in October 1998. Stantec Inc. was founded in 1954 and is headquartered in Edmonton, Canada.
How the Company Makes MoneyStantec generates revenue primarily through the provision of professional services in engineering, architecture, and consulting. The company operates on a fee-for-service model, charging clients for its expertise in project planning, design, and management. Key revenue streams include contracts for infrastructure projects, environmental assessments, and building design services. Stantec also benefits from long-term partnerships with government agencies and private enterprises, which provide a steady flow of projects. Additionally, the company pursues opportunities in various markets, including renewable energy and urban development, which contribute to its earnings. Stantec's focus on sustainability and community engagement enhances its competitive positioning and opens avenues for securing new contracts.
Stantec Earnings Call Summary
Earnings Call Date:Nov 13, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Mar 04, 2026
Earnings Call Sentiment Positive
Stantec reported strong financial performance with significant revenue and adjusted EBITDA growth, particularly in the Water and Energy segments. The U.S. market showed robust growth, although there were challenges with federal contract signings affecting backlog visibility. Overall, the company demonstrated resilience and a positive outlook for future growth.Q3-2025 Updates
Positive Updates
Strong Revenue Growth
Net revenue grew to $1.7 billion in Q3 2025, an increase of almost 12% compared to Q3 of last year, driven by organic and acquisition growth, each over 5%.
Record-High Adjusted EBITDA Margin
Stantec achieved an all-time high adjusted EBITDA margin of 19%, a 100 basis point increase compared to Q3 of last year.
Significant Growth in Water and Energy Segments
Water business delivered almost 13% organic growth, Energy & Resources delivered nearly 10%. Double-digit growth was also seen in certain geographies for these sectors.
Strong Performance in U.S. Market
In the U.S., net revenue increased over 14% in Q3, with 4.6% organic growth and 9% acquisition growth.
Impressive Adjusted EPS Growth
Adjusted EPS grew by 17.7% compared to Q3 2024.
Increase in Contract Backlog
Contract backlog stood at $8.4 billion, an almost 15% increase year-over-year, representing approximately 13 months of work.
Strong Cash Flow and Liquidity
Year-to-date operating cash flows are up 86% compared to 2024, reflecting strong revenue growth and operational performance.
Negative Updates
Flat Backlog Growth in U.S.
Year-to-date backlog in the U.S. has been flat, largely due to slower procurement cycles and delays in project signings.
Challenges in Federal Contracting
The U.S. saw a slowdown in federal contract signings due to government shutdown and procedural changes, affecting backlog visibility.
Company Guidance
During Stantec's Third Quarter 2025 Results Webcast and Conference Call, the company reported strong financial performance, driven by robust organic growth across all regions and business units. Net revenue for the third quarter was $1.7 billion, reflecting an almost 12% increase from Q3 2024, with organic and acquisition growth each surpassing 5%. The Water business achieved nearly 13% organic growth, while Energy & Resources saw close to 10% growth. Stantec's adjusted EBITDA grew by approximately 18%, reaching a record margin of 19%. Adjusted EPS increased by 17.7% compared to the same period last year. The U.S. market experienced a net revenue increase of over 14%, with 4.6% organic growth and nearly 9% from acquisitions. Canada reported a 7.6% net revenue growth entirely from organic sources, bolstered by strong performance in Water and Energy & Resources sectors. The global business achieved nearly 11% net revenue growth, with significant contributions from the water infrastructure projects in the U.K., Australia, and New Zealand. The company's contract backlog at the end of Q3 stood at $8.4 billion, up nearly 15% year-over-year, indicating approximately 13 months of work. Stantec adjusted its full-year net revenue growth guidance and increased its adjusted EBITDA margin outlook to 17.2-17.5%, anticipating continued demand across various sectors, including infrastructure, energy transition, and mission-critical facilities.Stantec Financial Statement Overview
Summary
Stantec's financial performance is strong, with significant revenue growth of 29.6% and robust profitability margins. The company maintains a healthy balance sheet with a manageable debt-to-equity ratio and strong return on equity. Cash flow is positive, with a 13.1% growth in free cash flow, indicating effective cash management.Income Statement
Stantec's income statement shows strong performance with a consistent increase in revenue, highlighted by a significant TTM revenue growth rate of 29.6% compared to the previous year. The company maintains healthy gross and net profit margins, with TTM gross profit margin at 43.1% and net profit margin at 5.6%. EBIT and EBITDA margins are also robust, indicating efficient operational management.85
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.70 in TTM, showing improvement from previous years. Return on equity is strong at 14.9%, indicating effective use of equity to generate profits. The equity ratio remains solid, suggesting a balanced capital structure.78
Positive
Cash Flow
Cash flow analysis reveals a positive trend with a 13.1% growth in free cash flow in TTM, supported by a strong free cash flow to net income ratio of 0.90. Operating cash flow to net income ratio is healthy, reflecting good cash generation relative to net income.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 6.77B | 5.87B | 5.07B | 4.46B | 3.64B | 3.68B |
| Gross Profit | 3.45B | 3.20B | 2.74B | 2.42B | 1.96B | 1.93B |
| EBITDA | 959.60M | 812.50M | 682.40M | 568.80M | 411.40M | 439.80M |
| Net Income | 483.50M | 361.50M | 316.50M | 247.00M | 200.70M | 171.10M |
Balance Sheet | ||||||
| Total Assets | 8.12B | 6.96B | 5.77B | 5.65B | 5.23B | 4.39B |
| Cash, Cash Equivalents and Short-Term Investments | 382.30M | 228.50M | 352.90M | 148.30M | 193.90M | 289.50M |
| Total Debt | 2.71B | 2.04B | 1.70B | 1.92B | 1.92B | 1.32B |
| Total Liabilities | 4.89B | 4.01B | 3.32B | 3.37B | 3.22B | 2.46B |
| Stockholders Equity | 3.23B | 2.95B | 2.45B | 2.29B | 2.00B | 1.93B |
Cash Flow | ||||||
| Free Cash Flow | 804.90M | 504.10M | 419.40M | 235.80M | 351.20M | 572.60M |
| Operating Cash Flow | 857.40M | 603.10M | 520.00M | 304.30M | 397.00M | 603.80M |
| Investing Cash Flow | -511.50M | -605.00M | -201.70M | -73.80M | -764.80M | -102.00M |
| Financing Cash Flow | -257.50M | -152.10M | -109.30M | -296.70M | 276.50M | -412.60M |
Stantec Technical Analysis
Positive
139.18
Price Trends
136.30
Positive
144.61
Negative
141.82
Negative
Market Momentum
0.62
Negative
58.77
Neutral
81.21
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STN, the sentiment is Positive. The current price of 139.18 is above the 20-day moving average (MA) of 132.94, above the 50-day MA of 136.30, and below the 200-day MA of 141.82, indicating a neutral trend. The MACD of 0.62 indicates Negative momentum. The RSI at 58.77 is Neutral, neither overbought nor oversold. The STOCH value of 81.21 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:STN.
Stantec Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | C$36.35B | 40.21 | 11.21% | 0.60% | 18.85% | 29.60% | |
71 Outperform | C$15.54B | 6.32 | 56.38% | 0.09% | 13.97% | 715.65% | |
70 Outperform | $15.73B | 32.54 | 15.96% | 0.67% | 11.73% | 41.17% | |
69 Neutral | C$1.63B | 17.40 | 21.68% | 2.88% | 6.26% | 0.52% | |
66 Neutral | C$2.68B | 31.46 | 22.05% | 0.99% | 13.02% | 52.88% | |
65 Neutral | C$2.12B | 253.91 | 0.92% | 2.38% | 25.68% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TSE:STN
Stantec
139.18
27.62
24.76%
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Stantec Corporate Events
Financial Disclosures
Stantec to Announce Q3 2025 Financial Results and Host Conference Call
Neutral
Oct 20, 2025
Stantec announced it will release its third quarter 2025 financial results on November 13, 2025, followed by a webcast and conference call on November 14, 2025. This announcement underscores Stantec’s commitment to transparency and engagement with stakeholders, as it provides insights into the company’s performance and strategic direction.
The most recent analyst rating on (TSE:STN) stock is a Buy with a C$161.00 price target. To see the full list of analyst forecasts on Stantec stock, see the TSE:STN Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.