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Tetra Tech
(NASDAQ:TTEK)
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Rating:74Outperform
Price Target:
$32.00
▲(1.23% Upside)
Action:Reiterated
Date:04/30/26
The score is driven primarily by strong financial performance (improving margins and high-quality free cash flow) and a supportive earnings call (raised guidance, backlog growth, and improved leverage). Offsetting this is weaker medium-term technical momentum (below key longer moving averages with negative MACD) and only moderate valuation support (P/E ~21 with a modest dividend yield).
Positive Factors
Strong free cash flow
Consistent, high free cash flow and near parity with net income indicate durable earnings quality and conversion. This funds dividends, buybacks, selective M&A, and working capital needs without relying on external financing, enhancing long-term financial flexibility and capital allocation.
Negative Factors
Revenue volatility / recent decline
An uneven top‑line trend and decline from FY2025 to TTM weakens predictability for multi‑year planning. Volatile revenue can pressure utilization and fixed-cost absorption, making margin and cash flow performance more contingent on winning new frameworks and smoothing project timing.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow
Consistent, high free cash flow and near parity with net income indicate durable earnings quality and conversion. This funds dividends, buybacks, selective M&A, and working capital needs without relying on external financing, enhancing long-term financial flexibility and capital allocation.
Read all positive factors
Tetra Tech (TTEK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.03B
Dividend Yield0.74%
Average Volume (3M)3.70M
Price to Earnings (P/E)18.4
Beta (1Y)0.39
Revenue Growth-6.06%
EPS Growth139.35%
CountryUS
Employees30,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.68
Shares Outstanding259,524,700
10 Day Avg. Volume2,642,345
30 Day Avg. Volume3,697,682
Financial Highlights & Ratios
PEG Ratio-1.44
Price to Book (P/B)5.00
Price to Sales (P/S)1.64
P/FCF Ratio20.28
Enterprise Value/Market Cap1.02
Enterprise Value/Revenue1.67
Enterprise Value/Gross Profit8.52
Enterprise Value/Ebitda11.90
Forecast
1Y Price Target
$41.50Price Target Upside31.29% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
EPS Forecast (FY)1.55
Revenue Forecast (FY)$4.31B
Tetra Tech Business Overview & Revenue Model
Company Description
Tetra Tech, Inc. operates as a global provider of specialized consulting and engineering services. The firm organizes its activities into two primary divisions: the Government Services Group (GSG) and the Commercial/International Services Group (C...
How the Company Makes Money
Tetra Tech makes money primarily by providing professional services under contracts for consulting, engineering, and program delivery. Revenue is generated from fees billed for labor (time-and-materials and labor-hour arrangements), project delive...
Tetra Tech Earnings Call Summary
Earnings Call Date:Apr 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 29, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: strong revenue growth (+8% YoY), record Q2 EBITDA, improved margins (Q2 margin +90 bps; YTD EBITDA margin +110 bps), significant backlog expansion (+8% sequential to $4.28B) and record cash generation with a stronger balance sheet (net debt/EBITDA ~1.0x). Management raised FY26 guidance and highlighted disciplined capital allocation (dividend increase, buybacks, selective M&A). Headwinds include a modest decline in U.S. commercial revenue, shorter-term backlog dynamics after USAID reductions, reduced near-term state & local guidance, and some seasonality-driven softness in CIG. On balance, the positive results, improved cash flows, margin expansion, and proactive capital allocation outweigh the transient and market-driven lowlights.Positive Updates
Top-Line Growth and Record Q2 Profitability
Net revenue increased 8% year-over-year in Q2. Reported EBITDA was $146 million with margin expansion of 90 basis points versus prior year (an all-time record for a second quarter). Reported EPS was $0.36 (including $0.02 from a Norway divestiture) and adjusted EPS was $0.34, which exceeded the high end of guidance and was the highest-ever Q2 adjusted EPS.
Negative Updates
U.S. Commercial Revenue Decline
U.S. commercial revenue, which represents 19% of the business, declined 2% YoY. Management cited an increase in energy and transmission services but an offset from reduced renewable energy revenue related to the wind-down of large offshore wind programs from the prior year.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-Line Growth and Record Q2 Profitability
Net revenue increased 8% year-over-year in Q2. Reported EBITDA was $146 million with margin expansion of 90 basis points versus prior year (an all-time record for a second quarter). Reported EPS was $0.36 (including $0.02 from a Norway divestiture) and adjusted EPS was $0.34, which exceeded the high end of guidance and was the highest-ever Q2 adjusted EPS.
Read all positive updates
Company Guidance
Management guided Q3 net revenue of $1.05–$1.10 billion with adjusted EPS of $0.38–$0.41, and raised FY2026 guidance to net revenue of $4.25–$4.40 billion and adjusted EPS of $1.50–$1.58 (≈9% revenue growth year‑over‑year at the midpoint with ~70 bps margin expansion at the midpoint). They highlighted sequential backlog growth of 8% to $4.28 billion, increased second‑half growth targets for U.S. federal and U.S. commercial to 8–12% (together ~40% of revenues), international growth of 5–10%, and state/local growth of 5–10% (state/local ≈15% of business). FY26 modeling assumptions include $33 million of intangible amortization, $24 million of depreciation, $33 million of interest expense, a 27.5% effective tax rate, and the guidance excludes contributions from future acquisitions.Tetra Tech Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
74
Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.91B | 5.44B | 5.20B | 4.52B | 2.84B | 3.21B |
| Gross Profit | 960.15M | 961.34M | 866.44M | 725.03M | 575.56M | 498.40M |
| EBITDA | 687.78M | 476.53M | 581.70M | 514.62M | 367.81M | 303.42M |
| Net Income | 440.43M | 247.72M | 333.38M | 273.42M | 263.13M | 232.81M |
Balance Sheet | ||||||
| Total Assets | 4.36B | 4.28B | 4.19B | 3.82B | 2.62B | 2.58B |
| Cash, Cash Equivalents and Short-Term Investments | 223.61M | 167.46M | 232.69M | 168.83M | 185.09M | 166.57M |
| Total Debt | 1.11B | 987.16M | 1.02B | 1.09B | 462.90M | 454.24M |
| Total Liabilities | 2.50B | 2.50B | 2.36B | 2.42B | 1.44B | 1.34B |
| Stockholders Equity | 1.86B | 1.78B | 1.83B | 1.40B | 1.18B | 1.23B |
Cash Flow | ||||||
| Free Cash Flow | 668.65M | 439.05M | 340.57M | 341.56M | 325.61M | 295.80M |
| Operating Cash Flow | 688.06M | 457.69M | 358.71M | 368.46M | 336.19M | 304.37M |
| Investing Cash Flow | -238.87M | -106.75M | -111.04M | -771.20M | -55.74M | -92.99M |
| Financing Cash Flow | -412.32M | -410.24M | -191.38M | 382.38M | -249.61M | -210.10M |
Tetra Tech Technical Analysis
Positive
31.61
Price Trends
28.78
Positive
30.62
Positive
32.66
Negative
Market Momentum
0.69
Negative
65.84
Neutral
76.77
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTEK, the sentiment is Positive. The current price of 31.61 is above the 20-day moving average (MA) of 29.07, above the 50-day MA of 28.78, and below the 200-day MA of 32.66, indicating a neutral trend. The MACD of 0.69 indicates Negative momentum. The RSI at 65.84 is Neutral, neither overbought nor oversold. The STOCH value of 76.77 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TTEK.
Tetra Tech Risk Analysis
Tetra Tech disclosed 52 risk factors in its most recent earnings report. Tetra Tech reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Tetra Tech Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.03B | 18.37 | 24.36% | 0.74% | -6.06% | 139.35% | |
73 Outperform | $12.83B | 40.08 | 18.85% | ― | 29.76% | 33.40% | |
71 Outperform | $21.70B | 60.21 | 32.77% | ― | 36.96% | 31.00% | |
70 Outperform | $4.54B | 11.43 | 26.57% | 1.65% | -3.61% | 10.17% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $4.85B | 18.98 | 15.21% | 0.25% | 13.40% | 19.67% | |
50 Neutral | $7.01B | 24.61 | 8.12% | ― | -8.32% | -87.53% |
* Industrials Sector Average
TTEK
Tetra Tech
30.99
-5.31
-14.63%
DY
Dycom
425.72
173.32
68.67%
FLR
Fluor
50.74
-1.53
-2.93%
KBR
KBR
35.47
-10.21
-22.35%
PRIM
Primoris Services
86.60
0.22
0.25%
STRL
Sterling Infrastructure
682.29
440.53
182.22%
Tetra Tech Corporate Events
Business Operations and StrategyStock BuybackDividendsFinancial Disclosures
Tetra Tech Lifts 2026 Outlook After Strong Q2 Results
Positive
Apr 29, 2026
On April 29, 2026, Tetra Tech reported strong results for its second quarter ended March 29, 2026, with revenue of $1.22 billion, net revenue of $1.05 billion, operating income of $132 million, EBITDA of $146 million, EPS of $0.36, and an 8% seque...
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.