WSP Global (WSP) AI Stock Analysis

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TSE:WSP Dividends

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WSP Global

(TSX:WSP)

80Outperform

WSP Global exhibits strong financial health with impressive revenue growth and strategic achievements, as highlighted in the earnings call. The main strengths include robust cash flow and successful integration of acquisitions. However, high valuation and increased debt levels pose potential risks. Technical indicators are mixed, suggesting some caution in the short term.

Positive Factors

Mergers and Acquisitions

The proposed acquisition of Power Engineers not only marks a transformative step that will position the engineering consultancy at the forefront of the energy transition.

Strategic Partnerships

The company announced a 7-year partnership with Microsoft to leverage its engineering expertise and develop new digital solutions for the industry.

Negative Factors

Financial Dependencies

It draws financial support from Street and WSP’s four anchor shareholders, leaving the door open for similar deals in the EMEIA or APAC regions.

WSP Global (WSP) vs. S&P 500 (SPY)

Market Cap

C$31.66B

Dividend Yield0.59%

Average Volume (3M)248.95K

Price to Earnings (P/E)46.9

Beta (1Y)0.85

Revenue Growth11.98%

EPS Growth22.53%

CountryCA

Employees72,800

SectorIndustrials

Sector Strength72

IndustryEngineering & Construction

Share Statistics

EPS (TTM)5.41

Shares Outstanding130,507,060

10 Day Avg. Volume214,237

30 Day Avg. Volume248,946

Financial Highlights & Ratios

PEG Ratio2.08

Price to Book (P/B)N/A

Price to Sales (P/S)1.98

Price to Cash Flow (P/CF)19.00

P/FCF Ratio17.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

C$297.11

Price Target Upside22.46% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering9

WSP Global Business Overview & Revenue Model

Company DescriptionWSP Global Inc. is a leading global engineering and professional services firm headquartered in Montreal, Canada. The company operates in various sectors, including transportation and infrastructure, property and buildings, environment, industry, and resources. WSP provides a wide range of services, such as consulting, engineering, design, and project management, to public and private sector clients worldwide. Its multidisciplinary approach allows it to deliver innovative solutions to complex engineering challenges, enhancing the sustainability and resilience of communities and environments.

How the Company Makes MoneyWSP Global makes money primarily through the provision of engineering and consulting services across its various sectors. Revenue is generated from fees charged for services such as project management, design, consulting, and engineering solutions. The company undertakes projects for government agencies, private sector companies, and other organizations, often working on long-term contracts. Key revenue streams include transportation and infrastructure projects, environmental consulting, building design and engineering, and industrial services. WSP's global presence and reputation for expertise enable it to secure significant contracts and partnerships, which contribute to its earnings. Additionally, strategic acquisitions and mergers enhance its service offerings and market reach, further boosting revenue potential.

WSP Global Financial Statement Overview

Summary

WSP Global shows strong financial performance with significant revenue and profit growth. Despite operational challenges indicated by absent EBIT for 2024, the firm maintains robust net profit margins. Solid cash flow management supports this strength, although rising debt levels could pose a risk.

Income Statement

Very Positive

WSP Global has demonstrated strong revenue growth, with Total Revenue rising from $8.8B in 2020 to $16.2B in 2024. Gross Profit Margin improved significantly, reflecting efficient cost management. However, EBIT is absent for 2024, which suggests potential operational challenges. Despite this, Net Profit Margin has remained robust, bolstered by consistent EBITDA growth.

Balance Sheet

Positive

The company's financial leverage has increased with higher Total Debt, leading to a higher Debt-to-Equity Ratio. However, Stockholders' Equity has grown steadily, supporting a stable Equity Ratio. The Return on Equity has improved, indicating effective utilization of equity capital, but rising debt levels pose a potential risk.

Cash Flow

Very Positive

WSP Global has shown positive Free Cash Flow growth, with Operating Cash Flow consistently exceeding Net Income, indicating strong cash generation capabilities. The Free Cash Flow to Net Income ratio is favorable, though the firm has experienced fluctuating cash flows from investing and financing activities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
16.17B	14.44B	11.93B	10.28B	8.80B
	Gross Profit
12.17B	2.18B	8.96B	7.87B	6.86B
	EBIT
0.00	1.20B	883.20M	766.80M	574.30M
	EBITDA
1.89B	1.64B	1.26B	1.22B	937.90M
	Net Income Common Stockholders
681.40M	550.00M	431.80M	473.60M	276.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
791.50M	501.10M	603.80M	1.07B	555.20M
	Total Assets
20.20B	15.58B	14.84B	11.25B	8.84B
	Total Debt
5.66B	4.26B	4.08B	2.80B	1.59B
	Net Debt
5.04B	3.89B	3.59B	1.87B	1.16B
	Total Liabilities
11.93B	9.25B	8.83B	6.59B	4.76B
	Stockholders Equity
8.27B	6.33B	6.01B	4.66B	4.08B
Cash Flow		Free Cash Flow
1.22B	806.30M	648.30M	938.90M	1.03B
	Operating Cash Flow
1.38B	986.30M	814.80M	1.06B	1.13B
	Investing Cash Flow
-2.44B	-510.40M	-2.68B	-1.34B	-185.30M
	Financing Cash Flow
1.31B	-597.40M	1.42B	790.20M	-746.30M

WSP Global Technical Analysis

Technical Analysis Sentiment

Negative

Last Price242.62

Price Trends

50DMA

246.57

Negative

100DMA

248.20

Negative

200DMA

240.81

Positive

Market Momentum

MACD

0.75

Negative

RSI

48.41

Neutral

STOCH

67.45

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:WSP, the sentiment is Negative. The current price of 242.62 is above the 20-day moving average (MA) of 241.81, below the 50-day MA of 246.57, and above the 200-day MA of 240.81, indicating a neutral trend. The MACD of 0.75 indicates Negative momentum. The RSI at 48.41 is Neutral, neither overbought nor oversold. The STOCH value of 67.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:WSP.

WSP Global Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WSP	80 Outperform	C$31.66B	46.90	9.33%	0.59%	11.98%	22.53%
STN	80 Outperform	C$13.76B	38.54	12.88%	0.70%	15.75%	7.64%
Sector *	63 Neutral	$4.27B	11.40	5.38%	214.63%	4.11%	-8.98%
ARE	50 Neutral	C$967.64M	―	-5.87%	4.93%	-8.64%	-136.62%

* Industrials Sector Average

Performance Comparison

TSE:WSP

WSP Global

242.62

30.93

14.61%

TSE:STN

Stantec

120.64

10.38

9.41%

TSE:ARE

Aecon Group Inc.

15.40

-0.94

-5.75%

WSP Global Earnings Call Summary

Earnings Call Date: Feb 26, 2025 | % Change Since: -6.12% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call for WSP Global Inc. highlighted strong revenue growth and successful strategic achievements, particularly with the POWER Engineers acquisition. However, there were some challenges with margin pressure in Asia and market conditions in Australia and New Zealand. Overall, the positive highlights significantly outweigh the lowlights.

Highlights

Record Revenue Growth

WSP Global Inc. achieved a 23% increase in net revenues for Q4 and a 12% increase for the full year compared to 2023, with a high level of organic growth at 7.5% for the year.

Successful Strategic Target Achievement

The company exceeded expectations with a 40 basis point increase in adjusted EBITDA margin for Q4, achieving a total increase of 120 basis points over the past three years.

Strong Cash Position

WSP ended the year with free cash flow more than doubling compared to the previous year, reaching $885 million.

Power Engineers Acquisition Success

The newly acquired POWER Engineers posted 16% organic growth in net revenue for Q4, indicating successful integration and synergy potential.

Lowlights

Margin Pressure in Asia

Adjusted EBITDA margin decreased slightly to 18.7% in Q4 compared to 19% in the previous year due to restructuring activities in Asia and a higher mix of lower-margin emergency response services.

Challenges in Australia and New Zealand

The market in New Zealand cooled down due to a change in government, and Australia saw the completion of large projects, requiring workforce demobilization.

Company Guidance

During the call, WSP Global Inc. reported a robust financial performance for the fourth quarter and full fiscal year 2024, surpassing their revised financial outlook. Key metrics highlighted included a 23% increase in net revenues for Q4 and a 12% increase for the full year, with organic growth at 7.5%. The adjusted EBITDA margin improved by 40 basis points in Q4 and 120 basis points over the last three years. The company concluded 2024 with a strong cash position, more than doubling its free cash flow from the previous year to $885 million. WSP also highlighted its successful strategic cycle from 2022 to 2024, with net revenue, EBITDA, and net earnings per share growing by over 55%, 65%, and 60%, respectively, compared to 2021. The company's backlog reached a record $15.6 billion, representing 10.9 months of revenues. Looking forward, WSP reiterated its 2025 financial outlook, aiming to further increase net revenue, adjusted EBITDA, and net earnings per share by 40%, 50%, and 60%, respectively, as part of its new 2025-2027 Global Strategic Action Plan.

WSP Global Corporate Events

Business Operations and StrategyFinancial Disclosures

WSP Global Exceeds 2024 Financial Expectations, Poised for Future Growth

Positive

Feb 26, 2025

WSP Global Inc. reported strong financial results for the fourth quarter and full year of 2024, surpassing management’s expectations in growth and profitability. The company achieved mid- to high-single-digit net revenue organic growth during its 2022-2024 strategic cycle and generated strong free cash flow, indicating robust financial health. With a solid balance sheet, WSP is well-positioned to implement its 2025-2027 Global Strategic Action Plan, which is expected to further enhance its market positioning and growth aspirations.

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.