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WSP Global (TSE:WSP)
TSX:WSP
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WSP Global
(TSX:WSP)80Outperform
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$32.22B
Dividend Yield0.58%
Average Volume (3M)258.58K
Price to Earnings (P/E)45.7
Beta (1Y)0.81
Revenue Growth11.98%
EPS Growth22.53%
CountryCA
Employees66,500
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)5.41
Shares Outstanding130,496,320
10 Day Avg. Volume325,661
30 Day Avg. Volume258,583
Financial Highlights & Ratios
PEG Ratio2.03
Price to Book (P/B)N/A
Price to Sales (P/S)2.20
Price to Cash Flow (P/CF)20.20
P/FCF Ratio19.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
C$299.22Price Target Upside21.19% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
WSP Global Business Overview & Revenue Model
Company DescriptionWSP Global (WSP) is a leading global engineering and professional services consultancy. The company operates in diverse sectors, including transportation, infrastructure, environment, energy, buildings, and resources. WSP offers a wide range of services such as planning, design, engineering, consulting, and management services, aimed at delivering sustainable and innovative solutions to clients across both public and private sectors.
How the Company Makes MoneyWSP Global makes money through a diversified revenue model primarily based on providing engineering and consulting services to a broad array of sectors. Key revenue streams include fees for project-based work in transportation and infrastructure, environmental consulting, energy projects, resource management, and building design. The company benefits from long-term contracts with government entities, private companies, and public institutions. Additionally, strategic acquisitions and partnerships enhance its service offerings and geographical reach, contributing to its earnings by expanding market access and service capabilities. WSP often engages in multidisciplinary projects, which further drives revenue by integrating various services across its sectors.
WSP Global Financial Statement Overview
Summary
WSP Global demonstrates strong financial performance with significant revenue growth, healthy profitability margins, and effective cash flow management. The balance sheet remains stable with a prudent approach to leverage, supporting the company's strategic growth initiatives.Income Statement
WSP Global's income statement showcases robust financial performance with strong revenue growth of 5.46% in the TTM, a healthy gross profit margin of 31.14%, and an impressive net profit margin of 4.24%. The company has improved its EBIT and EBITDA margins to 8.87% and 11.77% respectively, indicating operational efficiency. The consistent revenue growth trajectory and profitability margins reflect a stable and expanding business model.92
Very Positive
Balance Sheet
The balance sheet of WSP Global highlights a firm equity position with an equity ratio of 36.14%. The debt-to-equity ratio is 0.80, indicating moderate leverage, which is manageable within the industry norm. The company has a solid return on equity of 9.45%, demonstrating effective use of shareholder funds to generate profits. Overall, the balance sheet reflects stability with a balanced approach to debt and equity.85
Very Positive
Cash Flow
WSP Global's cash flow statement reveals a strong operational cash flow with an operating cash flow to net income ratio of 1.92, indicating robust cash generation relative to net income. The free cash flow to net income ratio stands at 1.66, highlighting effective management of capital expenditures and strong liquidity. The free cash flow growth rate of 32.75% signifies substantial improvement in cash flow generation capabilities, solidifying the company's financial health.88
Very Positive
| Breakdown | |||||
| TTM | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 15.23B | 14.44B | 11.93B | 10.28B | 8.80B | 8.92B | Gross Profit |
| 4.74B | 2.18B | 8.96B | 7.87B | 6.86B | 6.89B | EBIT |
| 1.35B | 1.20B | 883.20M | 766.80M | 574.30M | 564.70M | EBITDA |
| 1.79B | 1.64B | 1.26B | 1.22B | 937.90M | 954.10M | Net Income Common Stockholders |
| 645.10M | 550.00M | 431.80M | 473.60M | 276.00M | 286.50M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 501.10M | 501.10M | 603.80M | 1.07B | 555.20M | 370.10M | Total Assets |
| 15.58B | 15.58B | 14.84B | 11.25B | 8.84B | 8.68B | Total Debt |
| 4.26B | 4.26B | 4.08B | 2.80B | 1.59B | 2.45B | Net Debt |
| 3.89B | 3.89B | 3.59B | 1.87B | 1.16B | 2.19B | Total Liabilities |
| 9.25B | 9.25B | 8.83B | 6.59B | 4.76B | 5.34B | Stockholders Equity |
| 6.33B | 6.33B | 6.01B | 4.66B | 4.08B | 3.33B |
| Cash Flow | Free Cash Flow | ||||
| 1.07B | 806.30M | 648.30M | 938.90M | 1.03B | 665.30M | Operating Cash Flow |
| 1.24B | 986.30M | 814.80M | 1.06B | 1.13B | 814.30M | Investing Cash Flow |
| -291.20M | -510.40M | -2.68B | -1.34B | -185.30M | -322.10M | Financing Cash Flow |
| 83.30M | -597.40M | 1.42B | 790.20M | -746.30M | -496.80M |
WSP Global Technical Analysis
Negative
246.90
Price Trends
251.20
Negative
249.41
Negative
234.55
Positive
Market Momentum
0.99
Positive
43.43
Neutral
34.95
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 246.9 is below the 20-day moving average (MA) of 253.27, below the 50-day MA of 251.20, and above the 200-day MA of 234.55, indicating a neutral trend. The MACD of 0.99 indicates Positive momentum. The RSI at 43.43 is Neutral, neither overbought nor oversold. The STOCH value of 34.95 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | C$32.22B | 45.69 | 8.24% | 0.58% | 11.98% | 22.53% | |
76 Outperform | $14.06B | 38.89 | 12.27% | 0.73% | 15.75% | 7.64% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% | |
54 Neutral | C$1.42B | ― | -6.68% | 3.41% | -14.11% | -136.87% |
* Industrials Sector Average
Performance Comparison
TSE:WSP
WSP Global
246.90
26.37
11.96%
TSE:STN
Stantec
118.00
7.79
7.07%
TSE:ARE
Aecon Group Inc.
22.07
8.11
58.09%
WSP Global Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -4.62% | 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.