Stantec Inc (TSE:STN)
TSX:STN
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Stantec
(TSX:STN)
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Rating:69Neutral
Price Target:
C$134.00
▲(10.83% Upside)
Action:DowngradedDate:03/26/26
The score is primarily driven by solid underlying financial performance (growth and strong cash conversion) and a notably positive earnings outlook with clear 2026 targets. Offsetting these strengths are weak technical momentum (trading below key moving averages with negative MACD) and a relatively expensive valuation (P/E ~30.8 with a low dividend yield).
Positive Factors
Strong cash generation and conversion
High operating cash flow and near‑par free cash flow conversion (~92% of net income in 2025) provide durable internal funding for capex, dividends, debt paydown and selective M&A. Strong cash conversion reduces refinancing risk and enhances capital allocation optionality over cycles.
Negative Factors
Higher leverage and reduced flexibility
Leverage rising to roughly 1.0 debt/equity (and net debt/adjusted EBITDA ~1.3x) increases interest and refinancing exposure and narrows maneuvering room for larger strategic moves. Persistent higher debt could constrain capital allocation and increase vulnerability to margin shocks.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation and conversion
High operating cash flow and near‑par free cash flow conversion (~92% of net income in 2025) provide durable internal funding for capex, dividends, debt paydown and selective M&A. Strong cash conversion reduces refinancing risk and enhances capital allocation optionality over cycles.
Read all positive factors
Stantec (STN) vs. iShares MSCI Canada ETF (EWC)
Market Cap
C$13.79B
Dividend Yield0.67%
Average Volume (3M)397.73K
Price to Earnings (P/E)30.8
Beta (1Y)0.75
Revenue Growth11.73%
EPS Growth41.17%
CountryCA
Employees32,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.25
Shares Outstanding114,066,990
10 Day Avg. Volume358,071
30 Day Avg. Volume397,730
Financial Highlights & Ratios
PEG Ratio0.95
Price to Book (P/B)4.56
Price to Sales (P/S)1.81
P/FCF Ratio18.68
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$163.69Price Target Upside35.38% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)6.15
Revenue Forecast (FY)C$7.14B
Stantec Business Overview & Revenue Model
Company Description
Stantec 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, archit...
How the Company Makes Money
Stantec primarily makes money by delivering professional consulting and design services on a fee-for-service basis. Revenue is generated through client contracts to provide planning and advisory work (e.g., feasibility studies, permitting support,...
Stantec Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 13, 2026
Earnings Call Sentiment Positive
The call highlighted multiple strong financial and operational achievements for FY2025: double-digit revenue growth, record margins, significant cash flow improvement, backlog at all-time highs, and explicit 2026 targets that indicate continued momentum. Most business units—particularly Water, Buildings (Page acquisition), Global and Energy & Resources—delivered meaningful growth. Management also articulated a pragmatic AI strategy tied to revenue opportunities and efficiency gains. The primary challenges discussed were localized softness in Environmental Services and a muted Infrastructure year in 2025, potential timing/valuation friction in the M&A market due to recent public-market valuation resets, and a possible tougher Q1 comparison in Canada. Overall, the positives (strong growth, margin expansion, cash generation, backlog, and clear guidance) substantially outweigh the moderate and manageable headwinds.Positive Updates
Record Annual Revenue Growth
Net revenue grew ~10.7% year-over-year to $6.5 billion for FY2025 (management also referenced 'almost 11%'), driven by 5.0% organic growth and 3.9% acquisition growth.
Negative Updates
Environmental Services Softness
Environmental Services was relatively weak/flat in Q4 and was one of the softer BOUs in 2025; management expects pickup in 2026 but 2025 performance lagged other segments.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Annual Revenue Growth
Net revenue grew ~10.7% year-over-year to $6.5 billion for FY2025 (management also referenced 'almost 11%'), driven by 5.0% organic growth and 3.9% acquisition growth.
Read all positive updates
Company Guidance
Stantec's 2026 guidance calls for net revenue growth of 8.5%–11.5% (driven by organic growth and the Page acquisition), an adjusted EBITDA margin of 17.6%–18.2% and adjusted EPS growth of 15%–18% versus 2025 (targets exclude assumptions for additional acquisitions); management expects mid‑ to high‑single‑digit organic growth across geographies with continued strength in Water and Energy & Resources and margin expansion from project execution, tighter admin/marketing discipline, global delivery centers and digital/AI optimization. This outlook builds on 2025 results of net revenue $6.5B (+~10.7% YoY), gross revenue $8.1B, adjusted EBITDA margin 17.9% (+90 bps YoY), project margins ~54.3%–54.5%, adjusted EPS $5.30 (+19.9%; Q4 $1.25, +12.6%), operating cash flow $863M (+43.1%), free‑cash‑flow to net‑income conversion 1.3x, DSO 69 days (improved 8 days), net debt/adjusted EBITDA 1.3x (target 1–2x), backlog $8.6B (+9.5% YoY, ~13 months of work) and an 8.9% dividend increase to $0.98 annualized.Stantec Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
69
Positive
Cash Flow
74
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 8.14B | 5.87B | 5.07B | 4.46B | 3.64B |
| Gross Profit | 3.18B | 3.20B | 2.74B | 2.42B | 1.96B |
| EBITDA | 1.10B | 812.50M | 682.40M | 568.80M | 411.40M |
| Net Income | 479.40M | 361.50M | 316.50M | 247.00M | 200.70M |
Balance Sheet | |||||
| Total Assets | 7.96B | 6.96B | 5.77B | 5.65B | 5.23B |
| Cash, Cash Equivalents and Short-Term Investments | 398.10M | 228.50M | 352.90M | 148.30M | 193.90M |
| Total Debt | 3.13B | 2.04B | 1.70B | 1.92B | 1.92B |
| Total Liabilities | 4.72B | 4.01B | 3.32B | 3.37B | 3.22B |
| Stockholders Equity | 3.24B | 2.95B | 2.45B | 2.29B | 2.00B |
Cash Flow | |||||
| Free Cash Flow | 791.00M | 504.10M | 419.40M | 235.80M | 351.20M |
| Operating Cash Flow | 862.90M | 603.10M | 520.00M | 304.30M | 397.00M |
| Investing Cash Flow | -534.10M | -605.00M | -201.70M | -73.80M | -764.80M |
| Financing Cash Flow | -139.50M | -152.10M | -109.30M | -296.70M | 276.50M |
Stantec Technical Analysis
Neutral
120.91
Price Trends
126.50
Negative
130.56
Negative
140.63
Negative
Market Momentum
-1.65
Negative
46.45
Neutral
53.36
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STN, the sentiment is Neutral. The current price of 120.91 is below the 20-day moving average (MA) of 121.24, below the 50-day MA of 126.50, and below the 200-day MA of 140.63, indicating a bearish trend. The MACD of -1.65 indicates Negative momentum. The RSI at 46.45 is Neutral, neither overbought nor oversold. The STOCH value of 53.36 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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$14.94B | 5.72 | 56.38% | 0.09% | 13.97% | 715.65% | |
70 Outperform | C$2.92B | 130.21 | 1.66% | 2.38% | 25.68% | ― | |
70 Outperform | C$29.63B | 33.67 | 10.86% | 0.60% | 18.85% | 29.60% | |
69 Neutral | C$13.79B | 30.82 | 15.28% | 0.67% | 11.73% | 41.17% | |
65 Neutral | C$2.04B | 41.05 | 25.34% | 0.99% | 13.02% | 52.88% | |
64 Neutral | C$2.28B | 33.32 | 21.42% | 2.88% | 6.26% | 0.52% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TSE:STN
Stantec
120.91
7.94
7.02%
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Stantec Corporate Events
Business Operations and Strategy
Stantec Wins Key Role in Canada’s Arctic Over-the-Horizon Radar Buildout
Positive
Mar 4, 2026
Stantec has been selected by Defence Construction Canada, alongside construction partners Aecon and Pomerleau, to deliver multidisciplinary engineering and design services for the first phase of the federal Arctic Over-the-Horizon Radar project. T...
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.