ABM Industries Inc (ABM) stock analysis

P/E above its 5-year median

ABM Industries's P/E of 19.6 is above its own 5-year median of 17.6.

P/E below the industry

ABM Industries's P/E of 19.6 is below the Business Services median of 26.9.

EV/EBITDA above its 5-year median

ABM Industries's EV/EBITDA of 11.1 is above its 5-year median of 10.2.

P/B below the industry

ABM Industries's price-to-book of 1.78 is below the Business Services median of 2.98.

Trading below fair value

The share price of $54.28 is below our fair value estimate of $60.88.

Margin of safety under 20%

The price is 10.8% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 3.9% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -8.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew 43.6% over the last twelve months, against a 5-year average of 252% a year.

Growing slower than the industry

Revenue grew 6.0% over the last twelve months; the Business Services median is 9.1%.

Guidance raised

ABM Industries raised its full year total revenue growth outlook on Sep 8, 2026.

Gross margin slipping

Gross margin was 12.0% over the last twelve months, against 12.5% a year earlier.

Return on equity under 15%

Return on equity was 9.2% over the last twelve months and averaged 10.0% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 7.2%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

ABM Industries's return on equity of 9.2% is above the Business Services median of 1.4%.

Earnings grew over 5 years

Net income grew 252% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.8% over the last twelve months, against a 5-year average of 2.2%.

Net margin above the industry

ABM Industries's net margin of 1.8% is above the Business Services median of -1.7%.

High debt

Debt is 99.1% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 48.0% five years ago to 99.1%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 23.0% of total debt.

Interest not well covered

Operating income covers interest expense 3.0 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.42 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.81; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

ABM Industries paid dividends worth 2.1% of the share price over the last twelve months.

Yield below Treasuries

The 2.1% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; ABM Industries yields 2.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 40.5% of net income.

Covered by free cash flow

Dividends take 21.6% of free cash flow.