AECOM (ACM) Wins Contract From Metrolinx, Boosts Backlog
AECOM ACM is all set to serve as Metrolinx’s delivery partner for the Eglinton Crosstown West Extension project.
This 9.2-kilometer extension of the upcoming Eglinton Crosstown Light Rail Transit will take place from the future Mount Dennis Station to Renforth Drive. This will create a continuous rapid transit line between Scarborough and Mississauga via midtown Toronto.
As a delivery partner, AECOM will provide global and multi-disciplinary service offerings, including program management, advisory, commercial management, procurement and supply chain management, and project supervision services.
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.
The demand for ACM’s technical, advisory and program management capabilities is increasing due to an improving funding environment, highlighted by the recent passing of the federal infrastructure bill in the United States and the rising demand for ESG-related services.
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In the past three months, shares of the company have risen 10.2% compared with the Zacks Engineering - R and D Services industry’s 9.9% growth.
AECOM’s fourth-quarter fiscal 2023 earnings increased 13.5% on a year-over-year basis. Revenues also improved by 12% from the prior year. Adjusted net service revenues (NSR) — defined as revenues excluding subcontractor and other direct costs — moved up by 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's 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. The 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 as follows:
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 2024 is 8.7%. The consensus mark for GTES’ 2024 earnings has moved north to $1.37 per share from $1.35 in the past 60 days.
M-tron Industries, Inc. MPTI currently sports a Zacks Rank #1. MPTI delivered a trailing four-quarter earnings surprise of 35.6%, on average.
The Zacks Consensus Estimate for MPTI’s 2024 sales and EPS indicates growth of 12.5% and 13.4%, 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 2024 is 19.2%.
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AECOM (ACM) : Free Stock Analysis Report
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