Stantec (STN) AI Stock Analysis

• Market Cap: $15.95B
• Dividend Yield: 0.6%
• Average Volume (3M): 281.55K
• Price to Earnings (P/E): 41.3
• Beta (1Y): 0.72
• Revenue Growth: 15.62%
• EPS Growth: 9.66%
• Country: CA
• Employees: 32,000
• Sector: Industrials
• Sector Strength: 92
• Industry: Engineering & Construction
• EPS (TTM): 1.16
• Shares Outstanding: 114,066,990
• 10 Day Avg. Volume: 378,183
• 30 Day Avg. Volume: 281,554
• PEG Ratio: 5.50
• Price to Book (P/B): 4.55
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 25.58
• 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: $150.81
• Price Target Upside: 7.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 11

• Rating: 76 Outperform
• Price Target: C$157.00 ▲( 12.29% Upside)

Stantec's strong financial performance, complemented by positive earnings guidance and strategic corporate events, supports a favorable outlook. Although the high valuation and increasing debt levels pose challenges, the company's strengths in revenue growth and cash flow management mitigate these risks, making it well-positioned within its industry.

Positive Factors

Financial Performance

STN had a strong finish in 2024 and the momentum is expected to carry over into 2025.

Market Demand

Order intake has been strong with backlogs in Canada and the US at record levels, providing very good visibility into activity levels in 2025.

Mergers and Acquisitions

The balance sheet is strong and should support a meaningful amount of M&A and/or share buyback activity.

Negative Factors

Market Competition

Demand across STN's regions and business units remains strong with pricing more than offsetting wage inflation.

Stantec Business Overview & Revenue Model

Company Description

Stantec Inc. is a global design and consulting services firm headquartered in Edmonton, Alberta, Canada. The company operates in diverse sectors including infrastructure, water, energy, and built environment, providing engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics services. Stantec collaborates with clients across various industries to deliver sustainable solutions and innovative designs that enhance the quality of life in communities worldwide.

How the Company Makes Money

Stantec makes money primarily through providing professional consulting services across its key sectors: infrastructure, water, energy, and the built environment. The company generates revenue by offering engineering and architectural design services, environmental consulting, and project management. Its revenue model is based on fee-for-service arrangements, where clients are billed for the time and expertise provided by its professionals on a project basis. Significant partnerships with government agencies, private sector clients, and other organizations also contribute to its earnings. Stantec's diverse portfolio and global presence enable it to secure a steady stream of projects and maintain a robust financial performance.

Stantec Financial Statement Overview

Summary

Stantec shows strong financial health with consistent revenue growth of 15.7% and improved profit margins. The absence of EBIT in 2024 and rising debt levels are concerns, but the company's robust cash flow management ensures liquidity and financial stability.

Income Statement

Stantec has demonstrated consistent revenue growth, with a notable increase of 15.7% from 2023 to 2024. The gross profit margin improved from 38% in 2023 to 42.6% in 2024, indicating effective cost management. However, there was no EBIT recorded in 2024, which is a concern and affects profitability analysis. The net profit margin remained stable at approximately 4.8% in 2024, showcasing decent profitability.

Balance Sheet

The company's debt-to-equity ratio is 0.69 in 2024, indicating a moderate level of leverage. The return on equity (ROE) improved to 12.3% in 2024 from 12% in 2023, highlighting an effective use of equity to generate profits. With an equity ratio of 42.3%, Stantec maintains a solid capital structure, but the increasing debt levels require attention.

Cash Flow

Stantec's free cash flow grew by 13.5% in 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio of 1.67 in 2024 indicates effective cash management. The substantial free cash flow to net income ratio of 1.39 further demonstrates the company's ability to convert earnings into cash, enhancing financial flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
7.50B	6.48B	5.68B	4.58B	4.73B
	Gross Profit
3.20B	2.46B	2.42B	1.96B	1.93B
	EBIT
0.00	530.10M	383.60M	325.70M	344.50M
	EBITDA
901.70M	801.00M	677.50M	523.40M	491.50M
	Net Income Common Stockholders
361.50M	331.20M	247.00M	200.70M	171.10M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
254.70M	352.90M	148.30M	193.90M	285.00M
	Total Assets
6.96B	6.08B	5.65B	5.23B	4.39B
	Total Debt
2.04B	1.73B	1.92B	1.92B	1.32B
	Net Debt
1.81B	1.38B	1.77B	1.73B	1.03B
	Total Liabilities
4.01B	3.32B	3.37B	3.22B	2.46B
	Stockholders Equity
2.95B	2.76B	2.29B	2.00B	1.93B
Cash Flow		Free Cash Flow
504.10M	444.10M	229.40M	346.40M	569.60M
	Operating Cash Flow
603.10M	544.70M	304.30M	397.00M	603.80M
	Investing Cash Flow
-605.00M	-201.70M	-73.80M	-764.80M	-102.00M
	Financing Cash Flow
-152.10M	-134.00M	-296.70M	276.50M	-412.60M

Stantec Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 139.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

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 139.82 is above the 20-day moving average (MA) of 129.69, above the 50-day MA of 122.99, and above the 200-day MA of 115.69, indicating a bullish trend. The MACD of 5.30 indicates Negative momentum. The RSI at 73.00 is Negative, neither overbought nor oversold. The STOCH value of 76.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:STN.

Stantec Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BDT	81 Outperform	C$1.44B	14.36	26.31%	2.60%	16.14%	27.71%
STN	76 Outperform	$15.95B	41.33	13.13%	0.60%	15.62%	9.66%
WSP	75 Outperform	C$35.97B	50.15	9.42%	0.54%	16.77%	21.38%
BDGI	70 Outperform	$1.52B	22.72	19.89%	1.60%	10.97%	24.27%
ATRL	67 Neutral	$15.77B	51.34	8.66%	0.09%	12.05%	1.32%
Sector *	64 Neutral	$4.39B	11.81	5.20%	249.39%	3.96%	-12.36%
ARE	56 Neutral	C$1.19B	―	-9.26%	4.02%	1.70%	-154.73%

Stantec Corporate Events

Stantec to Lead Design for Mississauga’s Dundas BRT Corridor

Stantec has been selected by the City of Mississauga to lead the design and contract administration for the Dundas Bus Rapid Transit Mississauga East Corridor, a project aimed at enhancing regional transit connectivity and supporting urban growth. With a budget of C$580 million, the project will include dedicated bus lanes, improved accessibility, and environmentally friendly practices, aligning with regional transportation plans and the city’s commitment to sustainable development.

Stantec to Design Largest PFAS Treatment System in Northwestern US

Stantec has been selected by the City of Vancouver, Washington, to design the largest PFAS treatment system in the Northwestern US, aiming to provide cleaner drinking water by removing harmful substances. This project aligns with the EPA’s new regulations requiring public water utilities to reduce PFAS by 2029, showcasing Stantec’s role in helping municipalities meet these standards and ensuring long-term water safety and reliability.

Stantec’s 2024 Sustainability Report Highlights Global Impact and Financial Success

Stantec has released its 18th annual Sustainability Report, highlighting its achievements in sustainability and financial performance for 2024, with revenues of $4.63 billion. The report underscores Stantec’s commitment to sustainable development goals and its recognition as a top sustainable corporation. Key projects include environmental initiatives in Australia, Canada, the UK, the US, and Uruguay, showcasing Stantec’s role in addressing global challenges and driving community success.

Stantec Announces Q1 2025 Results Release and Annual Shareholder Meeting

Stantec has announced the release of its first quarter 2025 financial results, scheduled for May 14, 2025, followed by a webcast and conference call on May 15, 2025, led by the company’s CEO and CFO. Additionally, Stantec will hold its annual general meeting of shareholders on May 15, 2025, in a hybrid format, allowing participation both in person and via live webcast. These events are significant for stakeholders as they provide insights into the company’s financial performance and strategic direction.

Stantec Expands Irish Presence with Ryan Hanley Acquisition

Stantec has acquired Ryan Hanley, an Irish engineering and environmental consultancy, to enhance its presence in Ireland, particularly in the water sector. This acquisition builds on a successful joint venture between the two companies, aiming to leverage Ryan Hanley’s local expertise and Stantec’s global resources to address Ireland’s infrastructure challenges and expand into new markets such as energy and transport.