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Tetra Tech (TTEK)
NASDAQ:TTEK
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Tetra Tech
(NASDAQ:TTEK)
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Rating:73Outperform
Price Target:
$37.00
▲(6.47% Upside)
Tetra Tech's overall stock score is driven by strong earnings performance and strategic corporate events, which are offset by valuation concerns and mixed technical indicators. The company's solid financial foundation and growth prospects are tempered by liquidity risks and a high P/E ratio.
Positive Factors
Record Financial Performance
Record financial performance indicates strong demand for Tetra Tech's services, supporting long-term growth and profitability.
Strong Backlog and New Contracts
A robust backlog and new contracts provide revenue visibility and stability, enhancing future growth prospects.
Strategic Partnerships
Strategic partnerships and large contracts with government agencies strengthen Tetra Tech's market position and service offerings.
Negative Factors
Decline in Free Cash Flow Growth
A decline in free cash flow growth can impact liquidity, limiting the company's ability to invest in growth opportunities.
Challenges in Digital Initiatives
Challenges in digital initiatives may hinder Tetra Tech's ability to innovate and expand its service offerings in the digital space.
U.S. Commercial Work Decline
A decline in U.S. commercial work, especially in renewable energy, could affect revenue growth and market diversification efforts.
Tetra Tech (TTEK) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.80B
Dividend Yield0.75%
Average Volume (3M)2.71M
Price to Earnings (P/E)36.4
Beta (1Y)0.38
Revenue Growth4.69%
EPS Growth-24.37%
CountryUS
Employees30,000
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)0.45
Shares Outstanding260,828,250
10 Day Avg. Volume1,834,168
30 Day Avg. Volume2,707,452
Financial Highlights & Ratios
PEG Ratio-1.45
Price to Book (P/B)5.00
Price to Sales (P/S)1.64
P/FCF Ratio20.28
Enterprise Value/Market Cap1.09
Enterprise Value/Revenue2.01
Enterprise Value/Gross Profit10.01
Enterprise Value/Ebitda14.32
Forecast
1Y Price Target
$44.50Price Target Upside28.06% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.49
Revenue Forecast (FY)$4.17B
Tetra Tech Business Overview & Revenue Model
Company DescriptionTetra Tech, Inc. (TTEK) is a leading provider of consulting, engineering, and technical services, primarily focused on water, environment, and infrastructure sectors. The company offers a wide range of services including project management, engineering design, environmental assessment, and construction management. Tetra Tech serves a diverse clientele, including government agencies, municipalities, and private sector firms, with a commitment to sustainable solutions and innovative technologies.
How the Company Makes MoneyTetra Tech generates revenue through a variety of channels, primarily by providing professional services in engineering and consulting. The company operates on a fee-for-service model, where it charges clients for its expertise and project-based work. Key revenue streams include government contracts, where Tetra Tech partners with federal, state, and local agencies for environmental assessments, water management solutions, and infrastructure projects. Additionally, Tetra Tech benefits from long-term contracts with clients in the private sector, which contribute to stable revenue. Strategic partnerships with technology firms enhance its service offerings and can lead to joint projects, further bolstering revenue. The company also invests in innovative technologies, allowing it to expand its service capabilities and tap into emerging markets, which is crucial for sustaining growth and profitability.
Tetra Tech Earnings Call Summary
Earnings Call Date:Nov 12, 2025
(Q4-2025)
| % Change Since: |
Next Earnings Date:Feb 04, 2026
Earnings Call Sentiment Positive
Tetra Tech showcased strong financial and operational performance in fiscal year 2025 with record metrics in revenue, operating income, and segment growth. The company navigated challenges such as a U.S. federal government shutdown and a decline in U.S. commercial work effectively. There were some setbacks in digital initiatives, but the overall outlook remains robust, supported by a strong backlog and capital allocation strategy.Q4-2025 Updates
Positive Updates
Record Financial Performance
Tetra Tech reported record results for the fourth quarter and fiscal year 2025 with record highs across the board for net revenue, operating income, and earnings per share. Net revenue reached $1.07 billion, up 10% from the prior year, with operating income up 23% to $168 million and earnings per share up 29% to $0.44.
Strong Segment Performance
The Government Services Group (GSG) had an excellent year, with fourth quarter revenue growing 17% to $396 million. The Commercial/International Group also delivered strong results with fourth quarter revenue up 7% to $676 million.
International Growth
International work was about 45% of the overall business, growing at a 9% rate, driven by the UK's water business and Canadian clean energy practice. The U.S. federal work was up 22% from the prior year.
Backlog and New Contracts
Tetra Tech ended the quarter with $4.14 billion in backlog and was awarded over $1.2 billion in new contracts with U.S. defense agencies. The high-voltage transmission practice's backlog grew at a 120% rate year-on-year in the U.S.
Cash Flow and Capital Allocation
Cash from operations approached $0.5 billion, a 28% improvement over fiscal 2024. Tetra Tech increased its dividend by 12% and bought back $250 million in stock, with $598 million available in the stock buyback plan.
Negative Updates
U.S. Commercial Work Decline
U.S. commercial work was down slightly, driven by reductions in renewable energy work, although partially offset by growth in other sectors.
Impact of U.S. Federal Government Shutdown
The U.S. federal government's backlog has become shorter, affecting visibility. The recent government shutdown had an estimated $15 million to $20 million impact.
Transition Challenges in Digital Initiatives
Tetra Tech's digital products, particularly the SaaS products, have faced headwinds due to a moratorium on new software packages by the U.S. federal government, impacting growth.
Company Guidance
During the Tetra Tech earnings call for fiscal year 2025, management reported a robust financial performance with record highs in net revenue, operating income, and earnings per share. The company achieved a record net revenue of $1.07 billion for the fourth quarter, marking a 10% increase from the previous year. Operating income surged by 23% to $168 million, and earnings per share grew by 29% to $0.44. Tetra Tech's Government Services Group (GSG) experienced a 17% revenue growth, reaching $396 million, while its Commercial/International Group saw a 7% increase to $676 million. The company ended the quarter with a $4.14 billion backlog and secured over $1.2 billion in new contracts. Looking forward, Tetra Tech expects net revenue between $4.05 billion and $4.25 billion for fiscal year 2026, with earnings per share projected to range from $1.40 to $1.55.Tetra Tech Financial Statement Overview
Summary
Tetra Tech demonstrates solid profitability with a strong net profit margin and efficient equity utilization. However, challenges in revenue growth and a significant decline in free cash flow growth pose potential liquidity risks.Income Statement
Tetra Tech's income statement shows a strong net profit margin of 9.32% for the latest year, indicating effective cost management and profitability. However, the revenue growth rate has declined by 0.81%, which is a concern for future growth prospects. The gross profit margin and EBIT margin are stable, reflecting consistent operational efficiency.75
Positive
Balance Sheet
The balance sheet reveals a moderate debt-to-equity ratio of 0.55, suggesting a balanced approach to leveraging. The return on equity is robust at 28.50%, indicating efficient use of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing.70
Positive
Cash Flow
Cash flow analysis shows a significant decline in free cash flow growth by 71.8%, which could impact liquidity. The operating cash flow to net income ratio is 0.33, indicating that cash generation is aligned with reported earnings. The free cash flow to net income ratio is strong at 0.96, suggesting good cash conversion.65
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.78B | 5.44B | 5.20B | 4.52B | 2.84B | 3.21B |
| Gross Profit | 961.34M | 961.34M | 866.44M | 725.03M | 575.56M | 498.40M |
| EBITDA | 672.12M | 466.69M | 581.70M | 514.62M | 367.81M | 303.42M |
| Net Income | 247.72M | 247.72M | 333.38M | 273.42M | 263.13M | 232.81M |
Balance Sheet | ||||||
| Total Assets | 4.28B | 4.28B | 4.19B | 3.82B | 2.62B | 2.58B |
| Cash, Cash Equivalents and Short-Term Investments | 167.46M | 167.46M | 232.69M | 168.83M | 185.09M | 166.57M |
| Total Debt | 987.16M | 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 | 1.78B | 1.78B | 1.83B | 1.40B | 1.18B | 1.23B |
Cash Flow | ||||||
| Free Cash Flow | 439.05M | 439.05M | 340.57M | 341.56M | 325.61M | 295.80M |
| Operating Cash Flow | 457.69M | 457.69M | 358.71M | 368.46M | 336.19M | 304.37M |
| Investing Cash Flow | -106.75M | -106.75M | -111.04M | -771.20M | -55.74M | -92.99M |
| Financing Cash Flow | -410.24M | -410.24M | -191.38M | 382.38M | -249.61M | -210.10M |
Tetra Tech Technical Analysis
Negative
34.75
Price Trends
33.63
Positive
34.87
Negative
33.77
Positive
Market Momentum
0.12
Positive
48.95
Neutral
25.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TTEK, the sentiment is Negative. The current price of 34.75 is above the 20-day moving average (MA) of 34.55, above the 50-day MA of 33.63, and above the 200-day MA of 33.77, indicating a neutral trend. The MACD of 0.12 indicates Positive momentum. The RSI at 48.95 is Neutral, neither overbought nor oversold. The STOCH value of 25.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TTEK.
Tetra Tech Risk Analysis
Tetra Tech disclosed 53 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $10.05B | 35.04 | 21.90% | ― | 13.19% | 33.58% | |
75 Outperform | $7.13B | 26.07 | 18.56% | 0.23% | 21.45% | 67.31% | |
73 Outperform | $8.80B | 36.38 | 13.72% | 0.75% | 4.69% | -24.37% | |
73 Outperform | $5.54B | 14.17 | 27.77% | 1.48% | 9.66% | 29.01% | |
71 Outperform | $9.96B | 32.52 | 35.73% | ― | 6.20% | 72.81% | |
64 Neutral | $7.00B | 2.21 | 91.03% | ― | -1.81% | 1228.51% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
TTEK
Tetra Tech
34.75
-6.69
-16.14%
DY
Dycom
364.51
183.95
101.88%
FLR
Fluor
44.87
-10.55
-19.04%
KBR
KBR
44.02
-13.96
-24.08%
PRIM
Primoris Services
136.99
57.56
72.47%
STRL
Sterling Infrastructure
340.51
156.90
85.45%
Tetra Tech Corporate Events
DividendsBusiness Operations and StrategyFinancial Disclosures
Tetra Tech Announces Quarterly Dividend Amid Strong Results
Positive
Nov 12, 2025
On November 12, 2025, Tetra Tech announced a quarterly cash dividend of $0.065 per share, payable on December 12, 2025. The company reported record financial results for the fourth quarter and fiscal year 2025, with a net revenue of $1.16 billion for the quarter and $5.44 billion for the year. Tetra Tech also secured significant contracts, including a $500 million contract for environmental services with the USACE Baltimore District. The company’s strong performance was driven by demand for its consulting services in water management and digital water automation, positioning it well for future growth.
Executive/Board ChangesBusiness Operations and Strategy
Tetra Tech Announces Key Leadership Appointments
Positive
Oct 7, 2025
On October 7, 2025, Tetra Tech announced key leadership appointments as part of its succession planning. Roger R. Argus was promoted to President, and Jonathan S. Weiss was appointed President of the Commercial/International Services Group. These appointments aim to sustain the company’s performance and strategic growth, reflecting Tetra Tech’s commitment to operational excellence and talent development.
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.