AECOM (ACM) stock analysis

P/E below its 5-year median

Aecom's P/E of 32.2 is below its own 5-year median of 35.8.

P/E above the industry

Aecom's P/E of 32.2 is above the Engineering, Accounting, Research, Management, and Related Services median of 25.2.

EV/EBITDA above its 5-year median

Aecom's EV/EBITDA of 15.4 is above its 5-year median of 14.8.

P/B above the industry

Aecom's price-to-book of 4.12 is above the Engineering, Accounting, Research, Management, and Related Services median of 2.71.

Trading above fair value

The share price of $70.25 is above our fair value estimate of $66.64.

Margin of safety under 20%

The price is 5.4% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew 7.1% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 24.5% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing slower than the industry

Revenue grew -4.2% over the last twelve months; the Engineering, Accounting, Research, Management, and Related Services median is 0.2%.

Guidance lowered

Aecom lowered its Fiscal Year End 2026 GAAP income tax expense guidance outlook on Aug 10, 2026.

Gross margin slipping

Gross margin was 5.7% over the last twelve months, against 7.3% a year earlier.

Return on equity under 15%

Return on equity was 12.3% over the last twelve months and averaged 12.5% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 14.4%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Aecom's return on equity of 12.3% is above the Engineering, Accounting, Research, Management, and Related Services median of 10.5%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was 1.9% over the last twelve months, against a 5-year average of 2.0%.

Net margin below the industry

Aecom's net margin of 1.9% is below the Engineering, Accounting, Research, Management, and Related Services median of 5.1%.

High debt

Debt is 124% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 62.6% five years ago to 124%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 13.5% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 3.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.06 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 1.86; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Aecom paid dividends worth 1.8% of the share price over the last twelve months.

Yield below Treasuries

The 1.8% 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; Aecom yields 1.8%.

Dividend stability

Fewer than five years of dividend history.

Covered by earnings

Dividends take 52.0% of net income.

Covered by free cash flow

Dividends take 73.7% of free cash flow.