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1. Company Snapshot

1.a. Company Description

AECOM, together with its subsidiaries, provides professional infrastructure consulting services for governments, businesses, and organizations in the Americas, Europe, the Middle East, Africa, and the Asia Pacific.It operates through three segments: Americas, International, and AECOM Capital.The company offers planning, consulting, architectural and engineering design, construction and program management, and investment and development services to commercial and government clients.


It also invests in and develops real estate projects.In addition, the company provides construction services, including building construction and energy, and infrastructure and industrial construction.It serves transportation, water, government, facilities, environmental, and energy sectors.


The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015.AECOM was incorporated in 1980 and is headquartered Dallas, Texas.

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1.b. Last Insights on ACM

Breaking News: ACM Research reported Q4 revenue growth but suffered significant margin deterioration. Q4 gross margin fell to 40.9% and operating margin dropped. Management maintains 2026 revenue guidance of $1.08B-$1.175B, implying 20%-30% growth, but expects lower margins to persist into H1 2026. Meanwhile, AECOM received attention as one of the construction stocks set to benefit from the AI-powered data center boom. A Hold rating on ACM Research was given due to strong balance sheet despite margin concerns.

1.c. Company Highlights

2. AECOM's Strong Q1 2026 Earnings: A Promising Start to the Year

AECOM reported a robust first quarter, with net service revenue increasing by 5% when adjusted for fewer billable days, and adjusted operating margin expanding by 100 basis points to 16.4%, a new first quarter record. Adjusted EBITDA of $287 million and adjusted EPS of $1.29, although below estimates of $1.41, still represented a significant achievement. As Gaurav Kapoor highlighted, the company's operational outperformance and financial guidance were driven by its competitive advantages, strong end markets, and continued expansion of its addressable market.

Publication Date: Feb -19

📋 Highlights
  • Record Financial Performance:: Exceeded expectations with record NSR, adjusted EBITDA of $287M, and adjusted EPS of $1.29, alongside a 9% increase in backlog to an all-time high, driven by a 1.5 book-to-burn ratio.
  • Margin Expansion:: Segment adjusted operating margin rose 100 bps to 16.4% (new first-quarter record) and enterprise gross margin expanded 90-100 bps, reflecting operational efficiency and pricing strength.
  • Share Repurchase Strategy:: Increased buyback authorization to $1B, repurchasing $300M in Q1, demonstrating confidence in capital allocation and returning value to shareholders.
  • International Growth Momentum:: Delivered a 2.3x book-to-bill ratio in international markets, with wins in the UK, Australia, and Middle East, supported by 35,000–50,000 active global contracts.
  • AI & Technology Integration:: Accelerated AI adoption in workflows, targeting 2026 scaling in facilities and advisory services, with a 50% growth in the U.S. data center practice in FY25 highlighting tech-driven expansion.

Segment Performance and Backlog

The company's backlog increased 9% to a new all-time high, fueled by a 1.5 book-to-burn ratio, demonstrating a strong pipeline and the effectiveness of its strategy to expand its higher-margin advisory practice. The team is growing, and the pipeline is expanding rapidly, with several recent wins showcasing the value AECOM brings to clients. Internationally, the company delivered a strong book-to-bill ratio of 2.3x in the quarter, driven by wins in the UK, Australia, New Zealand, and Middle East.

Valuation and Growth Prospects

With a P/E Ratio of 26.6 and an EV/EBITDA of 11.28, AECOM's valuation suggests that the market has already priced in a significant level of growth. Analysts estimate next year's revenue growth at 6.2%, which may not be sufficient to justify the current valuation. However, the company's strong ROIC of 12.53% and ROE of 19.75% indicate a high level of profitability. The Dividend Yield of 1.14% and Free Cash Flow Yield of 5.0% also provide a relatively attractive return for investors.

Strategic Focus and Future Outlook

AECOM is transitioning from its historical business of design to a more balanced mix of design, project management, and advisory services, with tangible evidence of this shift already visible. The company is also investing in AI technology, which is expected to drive future growth and improve margins. With a robust pipeline and a strong backlog, AECOM is well-positioned to deliver sustained growth and create value for its shareholders.

3. NewsRoom

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AECOM Secures Key Role in Seattle's $1B Transit Modernization

Mar -02

Source: zacks.com

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ACM or STRL: Which Is the Better Value Stock Right Now?

Mar -02

Source: zacks.com

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Aecom (ACM) Upgraded to Strong Buy: Here's Why

Feb -27

Source: zacks.com

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Wall Street Analysts See a 29.65% Upside in Aecom (ACM): Can the Stock Really Move This High?

Feb -27

Source: zacks.com

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AECOM to provide design, environmental, and project management services for Sound Transit's Seattle-area regional transit expansion

Feb -27

Source: businesswire.com

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ACM Research's Rally Meets Reality After Weak Margins

Feb -27

Source: seekingalpha.com

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ACM Research Q4: Profitability Deterioration Is Short Term, But How Short Term?

Feb -26

Source: seekingalpha.com

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Buy 5 Construction Stocks Set to Soar on AI-Powered Data Center Boom

Feb -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Planning, Consulting, Architectural and Engineering Design, and Construction and Program Management Services

Expected Growth: 4.5%

AECOM's 4.5% growth in Planning, Consulting, Architectural and Engineering Design, and Construction and Program Management Services is driven by increasing infrastructure investments, urbanization, and government initiatives. Rising demand for sustainable and resilient infrastructure, coupled with AECOM's expertise in digital solutions and project management, further fuels growth.

AECOM Capital

Expected Growth: 5.5%

AECOM Capital's 5.5% growth is driven by increasing demand for infrastructure development, urbanization, and government investments in transportation and energy projects. Additionally, the company's strategic partnerships, diversified portfolio, and expertise in public-private partnerships (P3s) contribute to its growth momentum.

7. Detailed Products

Design & Consulting Services

AECOM provides design and consulting services for various industries, including transportation, buildings, water, and environment.

Construction Management

AECOM offers construction management services to oversee and manage construction projects from start to finish.

Operations and Maintenance

AECOM provides operations and maintenance services to ensure facilities and infrastructure are running efficiently and effectively.

Environmental Services

AECOM offers environmental services, including assessment, remediation, and sustainability consulting.

Program Management

AECOM provides program management services to oversee and coordinate large-scale projects and programs.

Cost Management

AECOM offers cost management services to help clients manage project costs and budgets.

Project Management

AECOM provides project management services to plan, coordinate, and deliver projects on time and within budget.

8. AECOM's Porter Forces

Forces Ranking

Threat Of Substitutes

AECOM's services are specialized, but there are some substitutes available in the market, which reduces the threat of substitutes.

Bargaining Power Of Customers

AECOM's customers are mostly governments and large corporations, which have limited bargaining power due to the complexity of the projects.

Bargaining Power Of Suppliers

AECOM relies on a network of suppliers for materials and equipment, but it has some bargaining power due to its large scale of operations.

Threat Of New Entrants

The construction and engineering industry has high barriers to entry, including regulatory hurdles and high capital requirements, which reduces the threat of new entrants.

Intensity Of Rivalry

The construction and engineering industry is highly competitive, with many established players competing for a limited number of projects.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 51.04%
Debt Cost 7.85%
Equity Weight 48.96%
Equity Cost 9.86%
WACC 8.84%
Leverage 104.27%

11. Quality Control: AECOM passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
TopBuild

A-Score: 5.4/10

Value: 4.0

Growth: 8.9

Quality: 6.2

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

1-Year Total Return ->

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AECOM

A-Score: 5.2/10

Value: 4.8

Growth: 6.4

Quality: 4.9

Yield: 1.0

Momentum: 6.0

Volatility: 8.3

1-Year Total Return ->

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API Group

A-Score: 5.0/10

Value: 2.3

Growth: 6.4

Quality: 4.8

Yield: 0.0

Momentum: 9.0

Volatility: 7.7

1-Year Total Return ->

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MYR Group

A-Score: 4.6/10

Value: 3.3

Growth: 4.9

Quality: 6.0

Yield: 0.0

Momentum: 9.0

Volatility: 4.3

1-Year Total Return ->

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Construction Partners

A-Score: 4.4/10

Value: 1.8

Growth: 9.1

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 4.7

1-Year Total Return ->

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Fluor

A-Score: 4.3/10

Value: 7.7

Growth: 6.0

Quality: 5.5

Yield: 0.0

Momentum: 3.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

97.28$

Current Price

97.28$

Potential

-0.00%

Expected Cash-Flows