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Tetra Tech (TTEK) Secures $800M Contract From Federal Client

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Tetra Tech, Inc. TTEK yesterday communicated that it has secured an $800-million contract from the U.S. Agency for International Development (“USAID”). The contract is applicable for the coming five years.

This is the sixth deal awarded to the company by the USAID since the beginning of calendar 2021.

The company’s shares gained 0.69% yesterday, ending the trading session at $147.44.

Inside the Headlines

Per the multiple-award contract, Tetra Tech’s prime responsibility will be to provide architect-engineer services to the federal agency. Its architects, engineers, and scientists will have to work for the development of infrastructure programs revolving around electrical grids, water supply, sanitation, solid waste, transportation, and the planning of commercial and urban zones.

To be more specific, the offerings by Tetra Tech will enable USAID to respond to health issues, expand education, enhance economic growth and food security, and help in environmental protection.

We believe that the contract will help Tetra Tech strengthen its existing business with the federal agency.

Order wins, especially those awarded by the U.S. federal government agencies or related institutions, are likely to benefit Tetra Tech in the quarters ahead. At the end of the third quarter of fiscal 2021 (ended June 2021), the company had a solid backlog of $3,249.9 million.

Among others, Tetra Tech secured a $49-million coastal geospatial contract from the National Oceanic and Atmospheric Administration this month. In July, the company received a $49-million contract related to the conservation of biodiversity and climate resilience from USAID.

For fiscal 2021 (ending September 2021), Tetra Tech anticipates net revenues from the U.S. federal clients to gain from enhanced analytics used in the environmental programs. It anticipates net revenues sourced from the U.S. federal clients to grow 10-15% year over year.

Net revenues are predicted to be $2.50-$2.55 billion for fiscal 2021 while its adjusted earnings are anticipated to be $3.69-$3.74 per share. For the fiscal fourth quarter (ending September 2021), the company expects net revenues and adjusted earnings to be $650-$700 million and 95 cents to $1.00 per share, respectively.

Zacks Rank, Price Performance and Earnings Estimates

Tetra Tech, with a $7.9-billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from a healthy backlog level, a diversified business structure, buyouts, and shareholders friendly policies. High costs are concerning.

In the past three months, Tetra Tech’s share price has increased 26.9% compared with the industry’s growth of 10.9%.

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Zacks Investment Research

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In the past 60 days, the company’s earnings estimates for the fourth quarter of fiscal 2021 have decreased 2% to 99 cents. During the same timeframe, the consensus estimate for fiscal 2021 (ending September 2021) of $3.70 jumped 0.8%. The consensus mark for fiscal 2022 (ending September 2022) grew 0.3% to $3.94.

Tetra Tech, Inc. Price and Consensus

Tetra Tech, Inc. Price and Consensus
Tetra Tech, Inc. Price and Consensus

Tetra Tech, Inc. price-consensus-chart | Tetra Tech, Inc. Quote

Stocks to Consider

Some better-ranked stocks in the Zacks Industrial Products sector are Kadant Inc. KAI, Energy Recovery, Inc. ERII, and Fuel Tech, Inc. FTEK. While Kadant currently sports a Zacks Rank #1 (Strong Buy), both Energy Recovery and Fuel Tech carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

In the past 60 days, the bottom-line estimates for these companies have improved for the current year. Further, the earnings surprise for the last reported quarter was 33.11% for Kadant, 300.00% for Energy Recovery, and 50.00% for Fuel Tech.

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Tetra Tech, Inc. (TTEK) : Free Stock Analysis Report

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