AECOM (ACM) Secures Place on Intelligent Automation Framework
AECOM ACM received an Intelligent Automation framework contract from the National Health Service Shared Business Services.
Per the agreement, AECOM’s digital consulting services and digital solutions will help clients accelerate their digital journeys and achieve better project outcomes. ACM will provide a range of specialized digital services, including consulting and advisory, technology implementation services related to Intelligent Automation adoption, data analytics and business intelligence and resource planning, organization design services and licensing.
The deal will support the adoption, implementation and ongoing development of Intelligent Automation to increase efficiency, reduce costs and risks and improve customer and patient experience.
AECOM has been appointed to Lot 1 of the framework, which covers Intelligent Automation services. Lot 1 is designed to provide expertise and specialist support to help organizations set up and implement in-house Intelligent Automation services.
Colin Wood, chief executive of AECOM’s Europe & India region, stated, “Intelligent Automation has huge potential to bring wide-ranging efficiencies to public services in the UK. Our industry-leading Digital AECOM practitioners look forward to supporting the varied clients on this framework in adopting and implementing this emerging technology to improve business operations and services for their customers.”
The stock lost 2.26% in the day trading session on Dec 20, 2023.
Impressive Higher-Margin, Lower-Risk Professional Services Firm
AECOM is a leading solutions provider, supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and environmental, energy and water businesses.
Demand for ACM’s technical, advisory and program management capabilities is increasing on the back of an improving funding environment, highlighted by the recent passing of the federal infrastructure bill in the United States and rising demand for ESG-related services.
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In the past three months, shares of the company have gained 11.8% compared with the Zacks Engineering - R and D Services industry’s 10.9% growth.
AECOM’s fourth-quarter fiscal 2023 earnings increased 13.5% on a year-over-year basis. Revenues also improved 12% from the prior year. Adjusted net service revenues (NSR) — defined as revenues excluding subcontractor and other direct costs — increased 8%. The design business contributed 90% to the total NSR and recorded year-over-year growth of 8%. Adjusted EBITDA also rose 10% year over year.
As of the fiscal fourth-quarter end, the total backlog came in at $41.17 billion compared with $40.18 billion reported in the prior year. The current backlog level includes 54.8% contracted backlog growth. A record-high 12.7% growth in the design business backlog (on a constant currency basis) reflects solid quarterly wins and a pipeline of opportunities.
For fiscal 2024, the company anticipates generating 8-10% organic NSR growth.
Zacks Rank & Other Key Picks
AECOM currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks that warrant a look in the same industry are:
Gates Industrial Corporation plc GTES manufactures engineered power transmission and fluid power solutions. GTES currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GTES’ expected earnings growth rate for 2023 is 10.5%.
M-tron Industries, Inc. MPTI currently flaunts a Zacks Rank #1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average.
The Zacks Consensus Estimate for MPTI’s 2023 sales and EPS indicates growth of 30.6% and 156.7%, respectively, from the previous year.
Willdan Group, Inc. WLDN is a nationwide provider of professional, technical and consulting services to utilities, government agencies and private industry.
WLDN presently sports a Zacks Rank #1. Its expected earnings growth rate for 2023 is 47.7%.
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