Tetra Tech Inc (TTEK) stock analysis

P/E below its 5-year median

Tetra Tech's P/E of 22.7 is below its own 5-year median of 31.8.

P/E below the industry

Tetra Tech's P/E of 22.7 is below the Engineering, Accounting, Research, Management, and Related Services median of 25.2.

EV/EBITDA below its 5-year median

Tetra Tech's EV/EBITDA of 15.2 is below its 5-year median of 22.2.

P/B above the industry

Tetra Tech's price-to-book of 5.20 is above the Engineering, Accounting, Research, Management, and Related Services median of 2.71.

Trading below fair value

The share price of $37.61 is below our fair value estimate of $40.90.

Margin of safety under 20%

The price is 8.1% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 15.8% a year over the last three fiscal years.

EPS growing under 10% a year

Diluted EPS grew -1.4% 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 -7.6% over the last twelve months; the Engineering, Accounting, Research, Management, and Related Services median is 0.2%.

Guidance raised

Tetra Tech raised its fiscal 2026 adjusted EPS outlook on Jul 29, 2026.

Gross margin improving

Gross margin was 18.8% over the last twelve months, against 17.0% a year earlier.

Return on equity

Needs positive equity and five years of results.

Return on capital over 10%

Return on invested capital was 18.8%, above the 10% that usually covers the cost of capital.

Return on equity against the industry

Needs positive equity.

Earnings over 5 years

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

Net margin against its history

Needs five years of revenue and net income.

Net margin against the industry

Needs revenue and net income.

High debt

Debt is 43.3% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 28.1% five years ago to 43.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 70.8% of total debt.

Interest well covered

Operating income covers interest expense 15.4 times.

Short-term assets cover short-term debts

Current assets are 1.18 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.58; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Tetra Tech paid dividends worth 0.7% of the share price over the last twelve months.

Yield below Treasuries

The 0.7% 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; Tetra Tech yields 0.7%.

Dividend not cut

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

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 12.7% of free cash flow.