Q4 Earnings Preview for AECOM (ACM)

in INVESTING IDEAS by

AECOM (NYSE:ACM) is scheduled to report Q4 earnings results on November 12, 2019. The company is expected to report earnings of $0.79/share on revenue of $5.243 billion. The consensus earnings per share (EPS) of $0.79/share is based on a poll of 5 analysts and represents a decline of -4.8% over the same quarter last year when the company reported earnings of $0.83/share.

The revenue forecast of $5.243 billion based on a poll of 7 analysts implies a year-over-year (YoY) decline of -1.2%. Last year the company reported $5.306 billion in revenue for the quarter.

Expected to report EPS decline of -$0.04/share for Q4, 2019
Metric Expected Prior Year YoY Change
Revenue $5,242.75 $5,305.85 -1.2%
EPS $0.79 $0.83 -4.8%

Earnings Call Trends

Historically, management has exceeded analyst expectations 5 out of the last 8 tracked quarters, and missed expectations 3 quarters. What are your expectations from AECOM for this earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q3, 2019 $0.75 $0.72 -4.1% Missed
Q2, 2019 $0.64 $0.69 8.4% Beat
Q1, 2019 $0.53 $0.56 5.7% Beat
Q4, 2018 $0.82 $0.83 1.0% Beat
Q3, 2018 $0.63 $0.62 -1.6% Missed
Q2, 2018 $0.66 $0.67 1.5% Beat
Q1, 2018 $0.54 $0.57 4.6% Beat
Q4, 2017 $0.75 $0.74 -1.3% Missed

One question we always consider here at the Bankers’ Tribune is how important are earnings reports to AECOM’s stock price performance? It’s more important for some companies than for others. In the following table, we summarize the company’s stock price movements after earnings releases.

The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price did not react much to the update.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-06 $33.44 $33.47 0.1% Increase
2019-05-08 $33.11 $33.86 2.3% Increase
2019-02-05 $31.03 $30.08 -3.1% Decline
2018-11-12 $32.72 $31.44 -3.9% Decline

Fundamentals And Technical Analysis

AECOM is currently trading at $43/share, up 1.3% for the day. The company is trading at approximately 102.7% of its 52 week high of $41.85/share. The company’s stock price is up 28.6% since the last earnings report and up 3.8% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 70.07 suggests the company is trading in technically overbought territory. The RSI is considered overbought when above 70 and oversold when below 30.

The current share price implies a price-to-earnings (P/E) multiple of 18.1x and a forward P/E multiple of 15.2x. AECOM’s current share price also implies a price-to-book (P/B) multiple of 1.6x. The following table summarizes some other key fundamental ratios:

Data as of November 11, 2019
Metric Value
Last Fiscal Period FY2019.Q3
Period End Date June 30, 2019
Stock Price (Current) $43
P/E Ratio 18.1x
P/E Ratio (Fwd) 15.2x
PEG Ratio 0.9
Total Debt to Capital (%) 35.6%
Levered Free Cash Flow $413.9 million
Enterprise Value / EBITDA 11.6x

Company Profile: AECOM

AECOM is a mid-cap stock with a market capitalization of $6.782 billion and a total enterprise value of $9.996 billion. The company operates in the Industrials sector and Construction & Engineering industry.

AECOM, together with its subsidiaries, engages in designing, building, financing, and operating infrastructure assets worldwide. It operates through four segments: Design and Consulting Services (DCS), Construction Services (CS), Management Services (MS), and AECOM Capital (ACAP). The DCS segment offers planning, consulting, architectural and engineering design, program management, and construction management services for industrial, commercial, institutional, and government clients, including the transportation, facilities, environmental, energy, and water markets. The CS segment provides building construction and energy, as well as infrastructure and industrial construction services. The MS segment offers program and facilities management and maintenance, training, logistics, consulting, technical assistance, and systems integration and information technology services primarily for agencies of the United States government and other national governments. The ACAP segment invests in and develops real estate, public-private partnership, and infrastructure projects.

The company was formerly known as AECOM Technology Corporation and changed its name to AECOM in January 2015. AECOM was founded in 1980 and is headquartered in Los Angeles, California.

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